E-Financial
PalmPay’s Efforts at Curtailing Cyber Fraud: Two Sides of the Same Coin
The financial inclusion rate in Nigeria has improved. Since the country adopted an inclusion strategy in 2012, adult Nigerians with a bank account have increased, and now account for more than two-thirds of the financially included.
According to the 2023 Report on Access to Financial Services in Nigeria, financial inclusion continues to expand and has so far been fueled by marginal growth among the country’s banked population and major gains in non-bank formal adoption.
Although approximately 40 million adult Nigerians remain formally excluded, formal financial inclusion was said to have grown from 56% in 2020 to 64% in 2023.
In the last four years, fintech companies in Nigeria have played a vital role in closing this gap, bringing financial services to the country’s unbanked and driving economic growth. Their successes, however, have not come without challenges.
Following the penetration of digital payment platforms in Africa, a fraud epidemic has plagued the fintech ecosystem in Nigeria, with Mobile, Web and POS being the most exploited channels by fraudsters in the country in 2023.
According to the 2023 NIBSS Annual Fraud Landscape report, incidents of “Fraud loss via Internet Banking increased by 325% between 2022 and 2023.”
The rise of digital payment platforms in Nigeria has increased the potential for cyber fraud, with fintech companies now forced to balance between making payment apps user-friendly and prioritising users’ safety to stem increased cyber fraud.
Fintech Side of the Coin
To address the fraud epidemic, the Fintech Association of Nigeria (FintechNGR) plans to unveil a fraud reporting framework sometime this year, while fintech platforms such as PalmPay continue to take the initiative to reevaluate their in-app safety features to protect their users from the activities of fraudsters.
Since launching in Nigeria in 2019 under a Mobile Money Operator (MMO) licence by CBN, PalmPay has grown to over 30 million users as part of its payment ecosystem.
In building a user-friendly app, PalmPay has also sought to foster a secure financial ecosystem by integrating safety features into its app so that the millions of users who transact with the app do so in a safe and trusted environment.
In general, PalmPay employs a closed-loop risk management system that involves continuous monitoring, analysis, and response to fraud threats and allows it to detect and prevent security risks in real-time and reduce the potential impact of fraud.
In particular, to reduce incidents of fraud, protect their users from fraudsters, and provide a safe banking environment, PalmPay binds their users’ phones to the app and has an auto-logout and biometrics feature to confirm users’ identity.
PalmPay Safety Features
Chika Nwosu, Managing Director, PalmPay, said the reason why the fintech platform has witnessed astonishing growth in four years was because “We prioritise the safety and security of our users.” He said they’ve been able to achieve this by “marrying security and safety with the customer experience to create a balance.”
Because it understands that curtailing fraud is a two-way street, PalmPay runs a Wallet Safety Workshop to teach users of its app and POS machines various security topics covering payment security and common security issues in daily life, such as password management, fraud detection, phishing and risk identification.
The safety workshop underscores PalmPay’s understanding of user security as an important part of curtailing fraud and encourages its users to ensure that they always secure their wallets using the several built-in safety features in its app.
A recent example was a series of campaigns encouraging its users to link their wallets with their BVN or NIN, following the directive by the Central Bank of Nigeria (CBN) for users of fintech platforms to link their wallets with their BVN or NIN.
To encourage the users to meet the CBN deadline of January 31, 2024, PalmPay introduced an incentive payment system where up to N500 was paid to users who got ahead of the deadline and validated their wallet information.
PalmPay users have several options for protecting themselves against fraudsters such as the two-factor verification process that makes it difficult for fraudsters to gain access to users’ apps without spooking them. In the first half of 2023, millions of users linked their secure email addresses to their PalmPay app. With this feature, PalmPay users effortlessly receive OTPs for their in-app login.
The PalmPay app has a device management feature that allows users to manage trusted devices and remove untrusted devices. When logging in on an untrusted device, users complete a comprehensive security verification process that involves inputting an OTP and their PIN to ensure security.
Role of PalmPay Users
While fintech companies play a role in protecting users from cyber fraud, the rising fraud incidents in Nigeria can sometimes be due to poor digital and financial literacy, but most especially the failure of many victims to report an attack.
In a report last year, Temitayo Oduwole, Head of IT and Payments, PalmPay, observed that customers do not take prompt action in incidents of fraud and that “Only 33 per cent report the same day or take the necessary right action on the same day.”
Effective investigation into incidents of fraud begins when the user reports to their bank that fraud has occurred. However, fraud, if not reported within the hour the crime occurred, allows criminals to move the stolen funds to ‘safe’ places.
Precaution remains the best remedy to protect oneself from cyber fraud. Anti-fraud expert Tosin Adenekan warned fintech users against trusting strangers with their personal information when performing digital transactions.
According to Mrs Adenekan, “Users of fintech platforms owe it to themselves to follow standard safety precautions to avoid being defrauded by cyber criminals.
“Do not allow strangers such as POS operators to handle personal ATM cards. This is because cybercriminals often posing as helpful POS operators can exploit this to observe PIN entries and distract card owners, ultimately swapping ATM cards.”
She urged fintech users to “take steps to reduce incidents of fraud on their wallets by creating strong passwords, enabling the two-factor authentication features on their fintech app, monitoring their wallets for unauthorised transactions, and protecting their personal login information when in public from prying eyes.”
Other steps to take include “regularly updating their apps, setting limits for their wallets, staying alert for phishing attempts, getting the proper financial education, using secure internet connection, being aware of pop-ups and fraudulent emails, and ensuring that operating systems and internet connections are up to date.”
To prevent falling victim to cyber fraud, Mrs Adenekan urged fintech users to adhere to these safety guidelines and “don’t trust everything on the internet.”
First Securities Brokers Limited, the stockbroking subsidiary of First Holdco Plc, recently announced its impressive performance in the latest Nigerian Exchange (NGX) Broker Performance Report. The firm secured first place in terms of trading volume and value of transactions for the month of July, 2025.
According to the report, First Securities Brokers Limited displayed strong trading activity and strategic market positioning, further solidifying its reputation as a significant player in the capital and equities market.
Fiona Ahimie, Chief Executive Officer and Managing Director of First Securities Brokers Limited expressed her pleasure at the firm’s achievement of a trading value of ₦414.457 billion, which accounts for 22.80% of the total trading value reported by the NGX during the review period. This performance highlights the effectiveness of the integrated model promoted by First Holdco Plc.
The Holding Company’s strategic focus on synergy within the Group played a crucial role in enhancing the performance of First Securities Brokers Limited.
“This remarkable achievement reflects the hard work and dedication of our entire workforce, as well as the trust our clients continue to place in us. It underscores our growing influence and effectiveness in the Nigerian equities market,” she added.
“Our focus on providing innovative and seamless trading solutions, coupled with deep market expertise, has been crucial to driving this success. We are not just a brokerage firm; we are strategic partners in our clients’ financial journeys. This recognition further motivates us to deliver exceptional value.”
“We remain committed to creating long-term value for our clients and stakeholders. Building on this momentum, we will continue to enhance our service offerings and further establish our position as a key driver of growth and development in the Nigerian financial market.”
Central Bank of Nigeria (CBN) has said that it plans to pursue civil, administrative, or criminal sanctions against parties found to have breached foreign exchange (FX) rules, following the conclusion of a forensic audit into undelivered forward contracts.
A document titled Frequently Asked Questions (FAQ) on the Settlement of Undelivered Forward Contracts, published on the Bank’s website on Thursday, revealed the development.
The audit, conducted by Deloitte from September 2023, reviewed transactions under the Retail Secondary Market Intervention Sales (RSMIS) window.
The document read, “The Central Bank of Nigeria is reviewing appropriate legal action against parties found to have violated applicable rules and regulations, based on the findings of the forensic audit. The Bank will collaborate with law enforcement and regulatory agencies to pursue civil, administrative, or criminal sanctions, as necessary.”
According to the apex bank, the contracts involved upfront naira payments in exchange for promised US dollar delivery on future dates—many of which went unfulfilled.
The CBN said the audit was necessary to verify the legitimacy of these contracts, protect FX reserves, and uphold regulatory standards.
The findings revealed extensive irregularities, including mismatches in beneficiary identities, exaggerated FX requests, use of incorrect or blank Form M submissions, and approvals for non-permissible imports.
The CBN noted that certain transactions were based on vague or false documentation, while others involved companies that lacked authorisation for the items they sought to import.
In several cases, the approved FX sale value exceeded the declared cost of the imported goods, raising questions of misrepresentation.
According to the CBN, such infractions rendered the contracts void under Nigerian law and ineligible for FX settlement.
Only verified and compliant contracts were honoured.
The Bank clarified that the affected counterparties had been given the opportunity to respond during the audit process before any contract was invalidated.
For those deemed invalid, the naira previously collected was refunded, but no FX was disbursed.
The CBN has declared the audit process closed and not open to appeal, citing the independence and procedural fairness of the review.
“The audit conclusions were based on a rigorous process carried out by an independent forensic expert (Deloitte), acting pursuant to a transparent mandate.
“The auditor contacted the authorized dealer banks concerning those contracts to get their explanations of the infractions before reaching conclusions on them. The findings have therefore met procedural fairness standards. The case of undelivered forward contracts is now concluded and closed,” the document stated.
Earlier in March 2024, the CBN announced the complete clearance of the valid foreign exchange backlog.
This was after Olayemi Cardoso, governor, CBN, in February, disclosed that about $2.4 billion foreign exchange backlog is not valid for settlement.
Cardoso clarified that out of the initially reported $7 billion FX liabilities of the federal government, about $2.4 billion were identified as invalid following a forensic audit by Deloitte Management Consultants.
Earlier report showed that CBN officially concluded the forensic audit into undelivered forward foreign exchange (FX) transactions and refunded the value of all unfulfilled and unvalidated deals to banks in naira.
The development was contained in a letter dated August 4, 2025, signed by Okey Umeano, acting director of the Financial Markets Department, and addressed to all authorised dealer banks.
The letter noted that all validated transactions had been paid, while the local currency equivalent of outstanding and unverified transactions had been returned to the banks.
A High Court in Abuja has awarded a fine of N85 million against Zenith Bank Plc for freezing a customer’s bank account by relying on an invalid court order.
Justice S. U. Bature, in a judgment, also ordered the bank to immediately unfreeze the account domicile in its branch at 63, Usuma Street, Maitama, opposite Transcorp Hilton Hotel, Abuja.
Justice Bature directed the bank to publish a public apology to the customer, Abhulimen & Co, in two national newspapers and on its website.
The judge held that the bank acted on an invalid order made by a Magistrate Court that lacked the requisite jurisdiction.
Justice Bature further held that the decision of the bank and the Nigeria Police Force (NPF), the 2nd defendant in the suit, to freeze the customer’s account, based on a supposed order by the Magistrate Court, without notifying the said customer, was illogical and a betrayal of the banker-customers’ relationship between parties.
The judge said it was unfortunate that a major financial institution like Zenith Bank, with a Legal Department, supposedly manned by lawyers, would claim to have acted based on an invalid order by a Magistrate Court that lacked the jurisdiction to entertain any banking related case, including issuing orders for the freezing of a bank account.
The judgement was delivered on July 16 but its certified true copy (CTC) made available to newsmen on Thursday in Abuja.
Paulyn O. Abhulimen, SAN, trading under the name and style of Abhulimen & Co, had, in the suit marked: FCT/HC/CV/2194/2024, sued the Zenith Bank and NPF as 1st and 2nd defendants.
Abhulimen sued through the law firm of Kehinde & Partners LP, claiming that, in early 2024, after being unable to access the account of her firm, Abhulimen & Co, and make transactions with it, she discovered that the bank placed a post-no-debt (PND) on it.
She claimed to have subsequently contacted an official of the bank, who is in charge of the account, Obi Okafor.
She said Okafor told her about the development, following which the bank, in March 13, 2024 claimed to have frozen the account based on an order obtained by the NPF from a Chief Magistrates Court in Mararaba Gurku, Nasarawa State.
Delivering the judgment, Justice Bature said: “The said account was opened at the first defendant’s (Zenith Bank’s) Transcorp Hilton branch, here in Abuja, and the 2nd defendant (NPF) is also domiciled in Abuja.
“The rationale behind seeking the said order at a Magistrate Court under the Nasarawa State jurisdiction cannot be understood, and the 2nd defendant did not appear, to be able to give any explanation or reason as to why they decided to follow this line of action.
“The said Magistrate Court lacked the territorial jurisdiction to entertain the application.
“Regarding the substantive jurisdiction of the court to make the order, it is clear from the provisions of Section 251 of the Constitution of the Federal Republic of Nigeria (1999 as amended), that matters relating to banks and banking transactions are within the exclusive jurisdiction of the Federal High Court, and matters relating to banker-customer disputes are jointly under the jurisdiction of the Federal High Court, State High Courts and High Court of the FCT,” Justice Bature said.
According to the judge, from the foregoing, it is clear that Magistrate Courts lack the jurisdiction to entertain an application for an order to freeze a bank account of a person, and should not have entertained the said application in its entirety.
“The legal department of the first defendant (Zenith Bank), being lawyers, should have been aware of this position of the law and taken the appropriate action in this situation, as they ought not to have obeyed the court order in the first place.
“Thus, the 1st defendant was wrong to have placed a PND on the account of the claimant based on the order of a court lacking the requisite jurisdiction to do so. I so hold,” the judge held.
The judge faulted the failure of the bank to inform the claimant about its decision to freeze her company’s account, describing it as a breach of the duty of care it owed to its customers.
Justice Bature said: “It is the humble opinion of this honourable court that, the first defendant owed the claimant a duty of care of duly informing her that her account had been frozen.
“The 1st defendant placed a post-no-debit on the account of the claimant’s firm, but same was not communicated to the claimant until she encountered difficulties in the use of the said account.
“It is the humble opinion of this honourable court that, the 1st defendant owed the claimant a duty of care of duly informing her that her account had been frozen
“The failure of the 1st defendant to inform the claimant of the state of affairs on her account amounts to negligence on the part of the 1st defendant and hence, a breach of duty of care and due diligence owed to the claimant. I so hold,” Justice Bature said.
Having found that the bank and the NPF acted unlawfully, the judge proceeded to declare among others, that an order to freeze a bank account cannot validly be granted ex-parte to last indefinitely.
He also declared that the Chief Magistrate Court of Nasarawa State, sitting at Mararaba Gurku, lacked the requisite jurisdiction to make an order to freeze the claimant’s Zenith Bank Plc’s account number: 1012272348, based on an ex-parte application.
“The defendants are hereby ordered to jointly and severally pay the sum of N60 million to the claimant as general damages for the embarrassment, psychological trauma, financial distress, emotional stress and grave inconveniences suffered by the claimant due to the defendants’ actions.
“The defendants are hereby ordered to jointly and severally pay the sum of N25 million to the claimant as cost of this action,” Justice Bature declared.
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