Institute for Money, Technology & Financial Inclusion

A major snag since the introduction of Nigeria’s cashless policy is pervasive electronicbanking fraud (e-fraud). Although the policy was aimed at encouraging electronictransactions, reducing physical cash in the economy and thereby reducing the risk ofcash related crimes, fostering transparency, curbing corruption/leakages and drivingfinancial inclusion, the perpetration of fraud threatens the cashless ecosystem. Theimplications of rampant e-fraud are enormous, not only for the banked populationadopting e-banking as a secure platform but also for the obstacles it poses to effectivelycapture the unbanked populace. Initial investigations show that with the prevalence offraud and subscriber victimization, there is a growing fear of migrating to and usingelectronic banking, while those defrauded are altogether opting out of e-banking. The Nigeria Deposit Insurance Corporation (NDIC) annual report stated a total of 3,756 fraudcases in 2013 involving N21.79billion, which represented a 21 percent increase from2012. Curiously, about half of the actual loss occurred within the first three months of2013. Looking between these aggregate pictures, the NDIC 2013 report also offers anelaborate list of fourteen major fraud channels - automated teller machine (ATM) fraudbeing the leading source. In a climate of mounting complaints from e-bankingcustomers/subscribers, we investigated the dimensions of e-fraud in Nigeria’s cashlessecosystem. We collected data in Oyo, Ogun and Lagos States and employed qualitativemethods of in-depth and key informant interviews with fraud victims, bank officials andfraud investigators at the Economic and Financial Crimes Commission (EFCC).

Read final report: escholarship.org/uc/item/53g3d5cq