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.”
Sterling Bank has called for the cancellation of bank transfer fees by major banks, announcing it will no longer take any money for itself for any local online transactions by its customers.
The announcement, made on April 1st, initially sparked widespread arguments, with many assuming it was a marketing prank tied to April Fools’ Day.
However, Sterling Bank, in a statement, has confirmed that it is not a stunt, that the zero-transfer-fee policy was real, and effective immediately.
With this move, Sterling becomes the first major Nigerian bank to take a definitive stand against the long-standing practice of charging customers for everyday digital transfers, an issue that has grown increasingly contentious as digital banking adoption deepens.
“We believe access to your own money shouldn’t come with a penalty,” said Obinna Ukachukwu, growth executive leading the Consumer and Business Banking Directorate, Sterling Bank
“This is more than a financial decision, it’s a values-based one. It reflects our commitment to making banking fair, inclusive, and truly customer focused.
“We’re not yet the biggest bank in Nigeria, but we’ve been the boldest,” Ukachukwu added.
“Sterling fearlessly believes in the future of Nigeria, and this is us backing Nigerians with more than words,” it sated.
Under the new policy, Sterling customers will enjoy free transfers for all local transactions conducted via the bank’s mobile app. This translates into significant savings, particularly for individuals and new small business owners who make frequent daily transfers.
The bank’s latest move has been met with widespread public approval, sparking positive reactions across social media and placing pressure on industry peers to follow suit.
We’re proud to lead this change,” Ukachukwu added. “We hope it inspires others to think differently about what customers truly need from their banks, not just in services, but in values.”
Fidelity Bank Plc has reported a pre-tax profit of N385.2 billion for 2024, representing a 210 per cent growth compared to the N124.3 billion recorded in 2023.
Dr Nneka Onyeali-Ikpe, managing director/chief executive officer, Fidelity Bank Plc,
The bank, in a statement released on Monday, declared a total dividend of N2.10 per share following its strong financial performance in 2024.
Gross earnings increased by 87.7 per cent to N1,04 trillion, driven by a 106.9 per cent growth in interest and similar income to N950.6 billion.
The increase in interest income was attributed to improved yields on earning assets and a 51.6 per cent expansion in the earnings base to N6.3 trillion.
This led to a profit after tax of N278.1 billion, representing a 179.6 per cent annual growth.
Commenting on the results, Dr Nneka Onyeali-Ikpe, managing director/chief executive officer, Fidelity Bank Plc, expressed satisfaction with the growth.
“We are delighted with our 2024 full-year (FY) performance, which showed strong growth across key revenue lines, improved asset quality and significant traction in our strategic business segments.
“Our impressive results led to a triple-digit increase by 210 per cent in Profit Before Tax (PBT), rising from N124.3 billion in 2023 to N385.2 billion in 2024,” she said.
A further review of the financial performance revealed that the bank’s net interest income increased by 127.1 per cent to N629.8 billion, driven by a high-yield environment in 2024.
To optimise its margin, the bank maintained asset yields above funding costs by maintaining a high low-cost deposit profile at 92.6 per cent.
This led to an increase in its Net Interest Margin from 8.1 per cent in 2023 FY to 12.0 per cent.
Similarly, the bank continued to deepen its market share in both the corporate and retail segments, with customer deposits increasing by 47.9 percent from N4 trillion in 2023 financial year to N5.9 trillion.
The increase was driven by strong double-digit growth across all deposit types.
The Retail Banking Business gained significant traction, with savings deposits increasing by 28.8 per cent to N1.1 trillion, marking the 10th consecutive year of double-digit annual growth in savings deposits.
In spite of the challenging economic conditions in 2024, the bank continued to support the real sector of the economy by increasing its Net Loans and Advances from N3.1 trillion in 2023 to N4.4 trillion in 2024.
“This remarkable performance demonstrates our capacity to deliver superior returns to our shareholders.
“In line with our commitment to them, we have declared a final dividend of N1.25 per share, bringing our total dividend for the 2024 financial year to N2.10 per share,” Onyeali-Ikpe explained.
Having consistently paid dividends since 2006, Fidelity Bank will pay investors a total dividend of N2.10 per share for the 2024 financial year.
This is subject to shareholders’ approval at its forthcoming Annual General Meeting (AGM) on April 29, 2025.
The dividends will be paid on April 29, 2025, to shareholders whose names appear on the register of members as of April 15, 2025.
The bank successfully completed the first phase of its capital raising exercise through a Public Offer and Rights Issue in 2024, which were oversubscribed.
Securities and Exchange Commission (SEC), has warned promoters and operators of entities engaged in a prohibited scheme that they will be liable to a penalty of not less than N20 million or imprisonment to a term of 10 years or both under the newly signed Investments and Securities Act (ISA) 2025.
Dr Emomotimi Agama, director-general, SEC,
Dr Emomotimi Agama, director-general, SEC, said it is one of the provisions of the ISA 2025 recently assented to by President Bola Tinubu.
Agama said this in a statement in Abuja on Tuesday said the new Act would strengthen the legal framework governing Nigeria’s capital market.
Agama said the commission previously lacked the legal power to prosecute Ponzi scheme operators, which had made it difficult to bring offenders to justice.
He said the Act would help the commission to better protect investors, and introduce reforms that would promote market integrity, transparency, and sustainable growth.
”So, N20 million is not the entire penalty or the entire money that will be charged or sanctioned to any suspecting or any accused capital market or non-capital market operator.
”It is just part of the penalties and or the sanctions that will be meted against such persons.
”Any profits or gains obtained from defrauding Nigerians will be recovered because it is not about the quantum of the fraud, it is about sanctions that will deter people from even getting into it.
”We recognise that a lot of Nigerians have fallen prey to these schemes and the reason why that is the case is because there were no sanctions.
”Protecting the investors in Nigeria is a cardinal responsibility of SEC and this law has provided the SEC with stronger powers to be able to do that,” he said.
The director-general said the Act had also introduced transformative provisions to further align Nigeria’s market operations with international best practice.
ISA, 2025, had repealed the Investments and Securities Act No. 29 of 2007.
Credit: NAN
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