‘How to Mitigate Fraud in the Digital Payment System’ | The Guardian Nigeria News

Experts and stakeholders in the Nigerian payments industry have called for concerted efforts to mitigate the growing threat of digital frauds.

They argued that cyber fraud was evolving, with increasingly sophisticated and widespread attacks, making securing payments and preventing fraud a top priority.

The experts, who gathered at the forum organized by Businessday Media, titled “Future of Payment and Fraud Conference 2022”, in Lagos, also spoke about the evolution of payment technology, existing payment trends, the future of payments and recurring fraud issues. They also deliberated on relevant solutions.

Speaking on the “role of law in mitigating fraud in the digital payment system”, Professor Kareem Olatoye from the Law School of Lagos State University (LASU), Ojo, said that the digital payment system is vulnerable to fraud and evidence of this abounds everywhere, with cybercrimes such as cyberstalking, cybersquatting, phishing, among others, leading the pack.

Olatoye said the report indicated that global losses from identity fraud amounted to $52 billion in 2021, pointing out that there is however a plethora of existing Nigerian laws containing provisions capable of helping to mitigate fraud.

According to him, these include the Cybercrime (Prohibition, Prevention) Act 2015; Central Bank of Nigeria Act; Economic and Financial Crimes Commission Act 2004; Money Laundering (Prohibition) Act 2012; the Advanced Free Fraud and Other Fraud Related Offenses Act 2006; the Communications Act 2003; Nigerian Deposit Insurance Corporation Act; Evidence Act 2011; Penal Code Act 1990; the Penal Code of 1990; Companies and Related Matters Act 2020.

Others are the Constitution of the Federal Republic of Nigeria 1999; Trademarks Act 2004; anti-corruption law; Bank Clerks Act, etc. (declaration of assets); National Drug Crimes Agency Act and Special Court (Miscellaneous Offences) Act.

The law professor said the law could be used to offer solutions, stressing that effective regulation is needed. He stated the registration/licensing of electronic payment platforms/Fintechs and their effective regulation; KYC requirement/supervision, S.37 cyber crime Act 2015.

Olatoye said data protection must be robust; pointing out that S.6 NITDA allows regulation of the exchange of electronic data.

According to him, under the NDPR, a company responsible for data processing must appoint a data protection officer who must ensure that the organization complies with data protection laws and regulations.

Olatoye said cryptocurrency regulation is needed, noting that the SEC is currently working with CBN on crypto trading regulation.

To mitigate the impacts, the law professor recommended that a law obliges payment software developers/owners to ensure the security of the payment system against hacking and other abuses that could lead to financial losses for users. He said there should be digital payment risk insurance in Nigeria as seen in the United States, adding that an online security law is also required as the bill shows. UK Online Safety Act (s. 36), which imposes a duty of care to provide protection when criminals impersonate criminals. to steal people’s personal data or break into bank accounts.

He said there was a need to impose and enforce the legal burden on anyone doing business using internet platforms to take responsibility for the security of customers making digital payments.

“Adequate punishment for cybercrime and effective enforcement. The digital infrastructure must be robust. Online policing/surveillance of financial transactions, international cooperation is needed,” he stressed.

Speaking on the topic “Contactless as the Future of Payment in Africa”, Visa Nigeria Country Manager, Andrew Uaboi, said contactless payment is the next frontier in the Nigerian fintech and payment ecosystem.

Contactless payment is a payment method that does not require cash or even the swiping of a card. This requires touching or holding the contactless card or smartphone near a compatible card reader when paying.

According to him, innovation will enable the growth of small businesses and will also help individual businesses to thrive.

He revealed that Nigerians should harness the full potential of the upcoming innovation which will bring more traders into the financial ecosystem.

“There has been a significant increase in contactless payment since the COVID-19 era. In the United States, for example, one in six people testified to making their first contactless payment during COVID-19 last year. We’ve also seen 40% growth in contactless payment year-over-year, and all of that payment is empowering small businesses as well. This allows for the growth of individual businesses as well as economies,” Andrew said.

He urged Nigerians to take advantage of the opportunity at hand to change their business and the economy at large.

Uaboi further explained that Visa is working with the Nigerian government, central bank and other partners to build a framework for which contactless will enter and thrive in Nigeria.

In a separate remark, Interswitch Managing Director Hakeem Lawal said that while overseas support is important for payments penetration in Africa, the development of the African payments system is largely in the hands of Africans through participation, policies and tailor-made solutions. to respond to needs. He said this was evident in the penetration of mobile money in sub-Saharan Africa and the wide spread of real-time online money transfers in Nigeria.

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