In recent times, digital money transactions have gained popularity partly because it allows instantaneous and borderless transfer of funds for players in the formal and informal sectors.
Many countries in Sub-Saharan Africa are now spearheading a major trend – the ‘cashless’ or ‘cash-lite’ society. In 2012, the Central Bank of Nigeria (CBN) introduced the cashless policy programme as a pilot scheme in Lagos, which placed bank charges on daily cash withdrawals that exceed N500,000 for individuals and N3, 000,000 for organizations.
In 2013, the programme was extended to six other states: Kano, Rivers, Anambra, Abia, Ogun and Abuja and in July 2014, it was rolled out nationwide. These types of policies play a very significant role in shaping people’s choices when selecting payment methods and making it a need for more people to embrace the various money transfer options that digital and online money transfer services offer.
According to the GSMA 2018 State of the Industry Report on Mobile Money, Sub-Saharan Africa has a huge number of registered mobile money accounts. The region has a massive 395.7 million registered mobile money accounts, representing 45.6% of the global figures. Of this figure, 145.8 million are active. When compared to the global figures of 298.7 million, it translates to 48.8% of the active accounts in the world.
Nigeria adds a significant percentage to this, as figures from the Nigeria Inter-Bank Settlement System show that the nation’s mobile money market had a total of 8.5 million customers as at December 2018. More recently, Nigeria’s National Bureau of Statistics (NBS) reported that a total of 557,083,712 electronic-payment transactions valued at N34.02 trillion were recorded in selected banks across the country Q1 2019.
While these figures are impressive showing the growth of the digital and online payment industry, a number of Nigerians are still very sceptical when it comes to using digital payment platforms. According to a 2018 Africa CyberSecurity report Financial services companies, government institutions, telecommunication firms and financial technology companies operating in Nigeria, among others lost about $800 million to cybercrime.
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Some online-users have been reluctant to embark on digital transactions without being familiar with the digital payments provider and confident in their security procedures due to the popularity of cybercrime and fraud.
In ensuring safety for customers while transacting via digital and online payment platforms, providers should take into consideration a number of procedures including ensuring that all connections through their platforms are secured and encrypted. It is important that information exchanged between systems are not accessible to any third party, deploy security checks for debit/credit cards to various payment service providers and have a compliance team that regularly monitors transactions to identify signs and deal with suspicious activities.
Customers need to look out for red flags that indicate that they are not transacting on a secure platform. Some of these red flags to look out for include a platform that is not fully licensed or regulated by the relevant regulatory body in the country of operation, a platform that does not have a dedicated customer service team that can quickly attend to any security breaches or other issues when experienced or a provider that asks you to provide your account details over the phone.
At WorldRemit, we strive to ensure that customers’ data and their hard-earned money is safe. As an entirely digital service, WorldRemit enforces higher standards of security than traditional agent-based money transfer firms in checking and documenting money movements. All monies are sent digitally, delivering a convenient, secure, cost-effective and fast method to receive money from friends and family in the diaspora.
We make sure that our transactions start at a bank account, and that our customers have verified channels and processes with their financial institution. Before a transaction is accepted, our systems ask senders to verify their identity using a global standard called Know-Your-Customer. Our transactions leave a digital audit trail for tracking unusual patterns, spotting potential fraud and ensuring efficient data sourcing to fulfill regulatory requirements.
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Online and digital payment security is a significant consideration for anyone looking to conduct any transaction through a digital payment platform. Hence, it is important for digital payment providers to give their customers the assurance that their funds and personal information are safe.
Pardon Mujakachi is Head of Sub-Saharan Africa at WorldRemit. Leading country-level expansion in Nigeria, Ghana, South Africa and Zimbabwe, Pardon also guides the development of WorldRemit’s partnership network and brand awareness across the wider Africa region.
