The foundation of Nigeria's electronic payment ecosystem is showing signs of strain as the total value of transactions processed through the Nigeria Inter-Bank Settlement System (NIBSS) reached N1.07 quadrillion in 2025. However, stakeholders warn that trust is eroding due to a surge in fraud incidents, settlement delays, and inadequate consumer protection mechanisms.
Fraud Incidents Surge in Digital Transactions
According to the Nigeria Electronic Fraud Forum (NeFF), reported fraud cases in the electronic payment channel increased by 45% year-on-year in the first half of 2025. The total attempted fraud value rose to N12.3 billion, with actual losses exceeding N3.5 billion. These figures underscore a growing vulnerability in a system that processes trillions of naira daily.
Industry insiders attribute much of the fraud to social engineering attacks, phishing, and unauthorized access to mobile banking apps. “The banks and fintechs are investing heavily in security, but the criminals are equally sophisticated,” said a senior official at NIBSS who requested anonymity. “We need a coordinated industry-wide response.”
Settlement Delays and Liquidity Pressures
Beyond fraud, settlement delays have become a recurring issue. Payment service providers (PSPs) and merchants have reported instances where funds take up to 48 hours to reflect in recipient accounts, disrupting business operations. The Central Bank of Nigeria (CBN) has acknowledged these bottlenecks, attributing them to legacy infrastructure and interoperability challenges among banks.
In a recent circular, the CBN directed all deposit money banks (DMBs) to upgrade their core banking systems to support real-time gross settlement (RTGS) by Q1 2026. Non-compliance could result in penalties, including fines and suspension from the payment system.
Consumer Trust Under Threat
Consumer confidence is further undermined by slow dispute resolution processes. Many victims of unauthorized transactions complain that banks take weeks to reverse fraudulent debits. The CBN's Consumer Protection Department reported a 30% increase in complaints related to electronic transactions in 2025, with the average resolution time stretching to 17 days.
“The system is becoming too big to fail, but it is also becoming too big to ignore the cracks,” said Dr. Olumide Oyedeji, a financial technology analyst at Lagos Business School. “If trust collapses, we could see a flight back to cash, which would be a major setback for financial inclusion.”
Industry Stakeholders Call for Action
The Association of Mobile Money and Banking Agents of Nigeria (AMMBAN) has urged the CBN to mandate biometric verification for all high-value transactions above N500,000. Meanwhile, the Electronic Payment Providers Association of Nigeria (E-PPAN) is advocating for a shared fraud database and real-time blacklisting of compromised accounts.
In response, the CBN announced plans to deploy a central fraud monitoring platform by end of 2026. The platform will aggregate transaction data from all licensed payment service providers and use artificial intelligence to flag suspicious activity in real time.
Economic Implications
Nigeria's payment system is a critical driver of economic activity. With over 200 million active bank accounts and more than 500 million monthly transactions, any disruption could have cascading effects on commerce, government revenue, and the broader financial system. The N1.07 quadrillion figure represents the aggregate value of all interbank transfers, point-of-sale transactions, mobile money, and web payments processed through NIBSS in the preceding 12 months.
“The scale of the payment system makes it a national asset,” said a CBN spokesperson in a press briefing. “We are committed to ensuring its integrity through robust regulation and continuous innovation.”
Way Forward
Experts recommend a multi-pronged approach: enhancing cybersecurity infrastructure, improving regulatory oversight, increasing consumer awareness, and fostering collaboration between banks, fintechs, and law enforcement. Without urgent action, the trust deficit could widen, undermining the gains made in cashless policy and financial inclusion over the past decade.
