General News
Risks of Mobile Payment and Agency Banking
Nigeria is experiencing phenomenal growth in its banking and e-banking sectors with new policies and regulations that is driving cashlite, branchless Banking and agency banking services for existing and new customer segments in urban and rural communities.
The financial institutions and other players in the financial sector are continually expanding the products and services they offer while constantly searching for new, easy and secure ways of enabling their customers to access and operate the various products and services they offer.
Regulatory changes in recent years is changing the way banking services is provisioned to unbanked, under banked in rural and urban communities with limited options for formal Banking services.
Mobile Payment is improving access to these groups, cost effectively through the use of Agents in cities, towns and rural communities.
The Central Banks around Africa are also actively licensing banks and other non prudentially managed organizations to deploy mobile financial services for basic banking services, payment, money transfers and other financial services using the third party agency network.
The benefits of agents as financial services intermediaries have proven to be successful in some countries like Philippines and Brazil. More than 18 percent of Banking activities and transactions are conducted at agent locations in Brazil alone with more than 140,000 active agency outlets in operation, making it the most extensive use of agents anywhere in the world.
The successes in Uganda and Kenya are also worthy of mentioned and both are directly linked to the availability of a well connected agency network of the mobile money providers in both countries.
Who are Agents?
Potential agents are either registered entities or non-registered with on going primary business with intentions to provide mobile money as an add-on service in addition to existing primary business?
It is desirable for agents to have primary on-going business to enable them manage liquidity, reduce rebalancing trips to the nearest bank branch, manage cash at hand and also reduce cost in the early days of low value adoption of mobile financial services.
The scheme operator partner decides the type of services it wants the banking correspondent to offer to the public in accordance with its strategic plan.
The Agent will meet the following benchmarks – ubiquity: available in prime locations and easy access, trustworthiness: trust in non repudiation of the service, low-cost: low cost set up structures with minimal barrier to entry, liquidity: cash in / cash out requirements that are within the affordability range for the targeted store owners.
Providing basic financial services at the agents for customers of the scheme provider could take many forms.
Bill payments, utilities payment, domestic money transfer, merchant services, low value deposits and withdrawals are some of the basic services available at the agent outlets.
Agents are weakest link in the mobilemoney ecosystem since the scheme provider may not be able to ensure certainty at all times at the outlets and also ensure guaranteed minimum service levels at the outlets. These agents whom are service providers or shop owners are also faced with potential frauds which could be by omission or commission.
Evidence has shown that fraud attempts in the early days of mobile money deployments are mostly targeted at agents that may not be well versed in the operations of the service or agents that connived with intentions to defraud the scheme provider.
Evaluating the Risks
Technology and application compromises could present a significant risk for agents if they are not well educated and trained on some processes like PIN management, due diligence or record keeping. MobileMoney and Agency Banking are services unlike airtime vending which is a product.
Liquidity risks which will be significant as Agent network grow slowly and confidence level improves over time.
If mobile money recipient cannot consistently cash out at agent outlet at their own locality, the more they are the weary and discouraged to use the mobile channel.
Providing multiple cash out points like ATM, Cards, transfer to account, token generation and other innovations will address this challenge.
An efficient cash forecasting , management processes and support for the agents will address this issue and reduce it to barest minimum. The agent risk could take may forms from outright robbery, theft, poor product knowledge, application failures or even poor customer due diligence processes.
In some countries, providers made great haste to launch out to achieve coverage very quickly and paid little or no attention to Agent training which later impacted future operations.
Mobile oney is a service and requires lots of education. Regulators are helping the ecosystem’s long term sustainability and growth by standardized training procedure that is enforced across providers, agent licensing and certification is encouraged by the regulator to providers.
Security
Potential agents during training or sign up activities are always skeptical about physical and logical security as a mobile payment agent. Incidences of robbery and mugging of agents are still unheard in Nigeria but agents are already reporting systematic attempts to defraud through fake transaction message notifications, subscriber enrollment via stolen ID, unauthorized PIN reset conducted at agent outlets.
John, newly signed up as an agent with one of the recently licensed mobile financial services provider, His major concern was His physical security and He made some decent efforts to put in place some anti burglary systems. He was recently defrauded of N5,000 ($30) when some dubious persons posing as the channel manager of the mobile money firm accessed his device at his location and changed transaction destination number on his phone to another number which they used to reply messages to confirm cash out transactions after they had left his outlet.
Fake Currencies
Fraudsters are quickly building their game plan and strategies to engage the agents.
Agents are primarily store owners, mom and pop stores, convenience outlets and some other organized retail outlets.
However, some unemployed youths and semi skilled workers are signing up to become agents in Nigeria without the required understanding of cash management and handling prior to their engagements as agents.
By omission or commission, incidences of agent cash- in currencies having some fake notes are on the rise in the semi urban areas.
During a recent field trip, some agents were interviewed in Badagry area of Lagos state and two out of ten confirmed that they had received fake notes at least once within the first one month of operation while one of them confirmed that He passed the fake note off to another cashing -out customer.
Agency Sustainability
If agents are not earning revenues in the early days of low volume due to low adoption, they tend to abandon the agency outlet and focus on other activities.
The challenge of agency sustainability in Nigeria is still unfolding and most agents that are faced with the sustainability issues are agents that do not presently have primary business and most probably hired new office spaces and mobile money is the only service that is provided at such outlets instead of providing mobile money as one of the services alongside the primary business.
Compensating Losses
There are three parties to the mobile money transaction though not in all cases – The scheme provider, agent and the customer.
Agents are supposed to be covered by the provider’s insurance plan covering cash in transit, fraud, fire and robbery with coverage up to N100,000 as contained in the regulatory framework but it is still unclear how customers can recover losses in extreme case of business closure especially if the scheme provider is a non-prudentially managed entity.
Few scenarios where agents had made claims for losses (which cannot be independently confirmed) experiences has shown that agents are usually left to recover losses without adequate support from the scheme provider.
The agent that received the fake currencies during our field visit in Lagos, expressed her regrets that the mobile money provider could not explain to Her in clear teams who bears the losses.
Judging from most stakeholders concerns in the mobilemoney ecosystem, fraud seems to be first on their checklist.
From a Bank’s point of view, dealing with agents can be a nightmare.
Innovative practices that the regulator can put in place to address the fraud concerns should include a centrally located fraud alert systems where all providers, agent and customers can log fraud issues in a timely manner so that patterns can be established with a view to curbing or reducing future occurrences and also using the outcomes in continuous training of Agents
Economic and Financial Crimes Commission (EFCC) has arraigned four persons before the Federal High Court in Lagos over an alleged money laundering scheme involving $5.3 million.
The defendants — Bamidele Ayodele Emmanuel, Abdullah Oriyomi, Garuba Fathiat Funmilayo and Gbenro Victor Ademola — were arraigned before Justice F. N. Ogazi of the Federal High Court sitting in Ikoyi on separate two-count charges bordering on money laundering.
According to the anti-graft agency, the alleged offence involved a total of $5,296,691 and contravenes the provisions of the Money Laundering (Prevention and Prohibition) Act, 2022.
One of the charges against Emmanuel alleged that between January 1 and 31, 2025, he retained $826,691 in a Wema Bank account, which he allegedly ought to have known formed part of the proceeds of unlawful activities.
The EFCC alleged that the act was contrary to Section 18 of the Money Laundering (Prevention and Prohibition) Act, 2022.
All four defendants pleaded guilty when the charges were read to them.
Following their pleas, Bilkisu Buhari, prosecution counsel, told the court that investigations showed the defendants admitted handing over their personal details to one Afeez Animashaun, who allegedly approached them at Mushin Market in Lagos, where they carried out their businesses.
According to the prosecution, the personal information was used to register several companies, including College Compass Eduguide Nigeria Limited, Hortifresh Solutions Nigeria Limited, Eduboost Innovation Nigeria Limited and Fixit Hardware and Tools Nigeria Limited.
The EFCC further alleged that corporate bank accounts were opened in the names of the companies and used to receive millions of dollars within January 2025.
Buhari told the court that the arrangement enabled the actual operators of the companies to remain anonymous while facilitating the movement of suspicious funds through Nigeria’s financial system.
She urged the court to convict the defendants based on their guilty pleas and impose appropriate sentences.
Justice Ogazi ordered that the defendants be remanded in a correctional facility and adjourned the matter until August 4, 2026, for judgment.
Dele Oye, chairman, Alliance for Economic Research and Ethics (AERE), has raised the alarm that an estimated eight million micro, small and medium enterprises (MSMEs) shut down across Nigeria between January 2023 and June 2024, representing about 20 per cent of the country’s estimated 40 million SMEs.
Dele Oye, chairman, Alliance for Economic Research and Ethics
He also warned that the scale of the collapse exposes a deepening crisis in the sector, describing it as an existential threat to Nigeria’s economic foundation.
He disclosed the figures in a policy brief titled “The Gap: Nigeria’s Industrial Policy 2025 vs. The Lived Reality of SMEs.”
According to Oye, research consistently shows that as many as 95 per cent of Nigerian SMEs fail within their first five years of operation, highlighting the urgent need for policies that go beyond design to effective implementation.
Quoting Femi Egbesola, national president of the Association of Small Business Owners of Nigeria (ASBON), Oye described the situation as a humanitarian crisis.
“Many businesses simply cannot cope with the harsh economic environment. Owners are closing their shops, unable to meet loan obligations or manage skyrocketing operational costs. Several people have died under the pressure; others are in the hospital. It’s a humanitarian crisis,” Egbesola said.
Oye identified three major factors driving SME failures: macroeconomic instability, limited access to affordable finance and soaring energy costs.
He, however, commended the Federal Government’s newly introduced Nigeria Industrial Policy 2025 (NIP2025), describing it as an ambitious framework designed to reposition the country’s manufacturing sector.
On the policy championed by the Federal Ministry of Industry Trade and Investment, Senator John Owan Enoh, minister of State for Industry, explained that it seeks to raise manufacturing’s contribution to Nigeria’s Gross Domestic Product (GDP) to 15 per cent by 2030 and 25 per cent by 2035, while boosting exports, creating jobs and positioning Nigeria as Africa’s leading industrial hub.
Oye noted that the policy rightly recognises MSMEs as central to achieving those objectives, pointing out that the sector contributes 46.32 per cent of Nigeria’s GDP and accounts for about 87.9 per cent of total employment.
He said the policy promises single-digit loans, industrial clusters, technology incubation centres, skills development programmes and fiscal incentives aimed at supporting businesses.
Despite these commitments, Oye argued that there remains a wide gap between policy intentions and the realities confronting entrepreneurs.
“For millions of Nigerian entrepreneurs struggling to survive, the NIP2025 reads less like a practical roadmap and more like a distant promise,” he said.
According to him, inflation, which climbed to 33.4 per cent in July 2024, persistent naira depreciation and the removal of fuel subsidies have sharply increased production and transportation costs, forcing many SMEs to downsize their workforce by as much as 70 per cent.
He also lamented the limited access to affordable financing, noting that only between 15 and 20 per cent of SMEs have access to formal bank credit. Where loans are available, he said, lending rates now exceed 35 per cent, making borrowing unsustainable for most small businesses.
Energy shortages remain another major burden, with businesses enduring prolonged power outages and relying heavily on generators.
Oye noted that diesel costs alone consume as much as 30 per cent of revenue for many SMEs.
He argued that previous industrial policies failed largely because of weak implementation rather than the absence of good ideas.
According to him, although government interventions have increased credit availability over the years, most SMEs use borrowed funds to cover operational expenses such as rent, inventory and energy costs instead of expanding production because of the difficult business environment.
To reverse the trend, Oye called on the Federal Government to declare an SME emergency and introduce targeted measures, including genuine single-digit interest loans, energy support for productive sectors and a moratorium on multiple taxation by state and local governments.
He also recommended loan products that align with SME cash flow cycles through longer repayment periods, revenue-based financing and appropriate grace periods.
In addition, he urged the government to prioritise the development of SME industrial clusters by providing reliable electricity, water, roads and security in selected locations within one year.
Oye further called for greater transparency through the National Industrial Development Monitoring System (NIDMS), recommending quarterly publication of detailed data on SME financing, beneficiaries, sectors and employment outcomes.
While describing Senator Enoh’s advocacy for NIP2025 as commendable, Oye stressed that Nigeria’s entrepreneurs need effective implementation rather than another policy document.
He said the policy would only succeed if it delivers tangible benefits to business owners, including bakery operators struggling with rising costs, transport operators forced to cut jobs because of higher diesel prices and artisans fighting to keep their businesses afloat.
“The ambition is right, the execution must now match it.”
MENXTT TECH NG, a Lagos-based technology company, has launched an initiative to make quality Dell laptops more affordable for Nigerians through flexible payment plans and extended warranty support.
The company said the initiative was aimed at helping students, entrepreneurs, professionals and small businesses acquire reliable computing devices despite rising technology costs.
According to the company, customers can now purchase premium pre-owned Dell Latitude, Dell Precision and Dell Inspiron laptops at competitive prices, with selected models available under staggered payment arrangements.
The laptops, it said, are designed to meet the needs of users ranging from students and office workers to architects, engineers, software developers, graphic designers and video editors.
Speaking on the initiative, the Co-Founder of MENXTT TECH NG, Mr Anthony Emeka Nwosu, said access to quality technology should not be limited by financial constraints.
“A laptop is no longer a luxury; it is an essential tool for education, business and career development.
“Unfortunately, many people are forced to settle for unreliable devices because of the high cost of new laptops.
“At MENXTT TECH NG, we want to bridge that gap by providing durable Dell business laptops at affordable prices, backed by a full one-year warranty and flexible payment plans.
“We want every student, entrepreneur, freelancer and business owner to have access to technology that helps them succeed,” he said.
Nwosu explained that every laptop undergoes comprehensive testing before delivery and comes with a one-year warranty, an original charger, a complimentary laptop bag, Windows 11 operating system and Microsoft Office Suite pre-installed.
He added that the company, an authorised Bitdefender Antivirus reseller in Nigeria, also installs genuine Bitdefender security software on every system to protect customers against cyber threats.
According to him, customers requiring additional productivity tools can also have licensed Foxit PDF software installed on their devices.
Nwosu said the flexible payment option was introduced in response to prevailing economic realities, enabling customers to spread payments over an agreed period.
He noted that the arrangement would make it easier for students, startups and growing businesses to acquire quality computers without placing excessive pressure on their finances.
Beyond laptop sales, the company provides information technology consultancy, computer repairs, software licensing, cybersecurity solutions and digital transformation services to organisations across Nigeria.
He reaffirmed the company’s commitment to supporting Nigeria’s digital economy by making dependable computing devices and enterprise technology solutions more accessible to individuals and businesses.
According to him, the initiative reflects MENXTT TECH NG’s vision of combining affordability, quality products and professional after-sales support to help more Nigerians participate in the country’s expanding digital ecosystem. (NAN)
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