 |
| Reps. |
The House of Representatives' Ad-hoc Committee, probing the economic, regulatory, and security dangers linked to cryptocurrency adoption and Point-of-Sale (POS) operations, has expressed fresh concern over what it described as a rapidly worsening fraud crisis threatening Nigeria’s financial stability.
At its resumed investigative hearing on Monday, the Committee Chairman, Hon. Olufemi Bamisile, stated that discussions with stakeholders had revealed “deep gaps” in the nation’s digital finance system, leaving citizens vulnerable to serious financial and security risks.
Bamisile revealed that the Committee had received several reports involving unregistered agents, cloned terminals, anonymous transactions and weak Know-Your-Customer (KYC) procedures. He warned that these lapses were fuelling an alarming rise in fraud across POS networks nationwide.
“We are worried about the rising level of fraud linked to POS operations,” he said. “Unprofiled agents, cloned terminals and weak KYC processes continue to expose citizens to avoidable risks.”
He also raised concern over unlicensed cryptocurrency activities infiltrating POS services, saying some operators now offer crypto-related transactions without approval. According to him, these activities pose “serious red flags” connected to anti–money laundering risks, terrorism financing, data breaches and the misuse of platforms originally designed for simple payments.
Bamisile further disclosed that the Committee had been informed of cases where fake companies were registered at the Corporate Affairs Commission (CAC) using stolen National Identification Numbers (NIN) and Bank Verification Numbers (BVN) to open accounts and channel illicit funds through unverified POS platforms. He also warned that sensitive financial data stored on foreign servers by some fintech companies hinders regulators from carrying out audits, tracing suspicious activity and enforcing compliance, posing a national security threat.
He, however, assured POS operators that the investigation is not aimed at shutting down the sector, noting that the industry itself struggles with issues such as fragmented regulations, overlapping agency functions and inconsistent policy directions. He explained that the Committee intends to propose laws that will harmonise regulation, strengthen security frameworks, protect consumers and support responsible innovation.
The Committee is expected to continue consultations with regulators, fintech operators and security agencies before submitting its final report to the House.
At the hearing, the National President of the Association of Digital Payment and POS Operators of Nigeria (ADPPON), Mr Paul Okafor, warned that the country’s POS ecosystem had reached a “critical emergency point,” with fraud rising to levels that now threaten national security.
He explained that the rapid expansion of the sector, growing from 50,000 operators in 2017 to over 2.3 million today, had overwhelmed regulatory capacity, which he said increased by “less than 10 percent” in the same period.
“This imbalance is what has created the crisis we are dealing with today.
“The regulators, especially the CBN, are not incompetent; they are simply overwhelmed by the speed and scale of growth,” he said.
Citing figures from the Nigeria Inter-Bank Settlement System (NIBSS), Okafor said POS, digital-payment and banking channels lost N17.67 billion to fraud in 2023, affecting over 80,000 customers.
He said the situation deteriorated sharply in 2024, with losses rising to N52.26 billion, an increase of N34.59 billion in one year.
He noted that attempted fraud across financial channels surged by 338 percent, while POS channels alone accounted for 26.37 percent of all incidents. Industry monitor FITC further reported a 95 percent rise in POS-related fraud in Q4 2024.
“More than 38,000 POS fraud cases were officially recorded in one year,” he said.
He added: “Unofficially, we estimate that more than 70,000 cases go unreported because victims simply give up.”
Okafor also warned that criminals are increasingly using POS agents as cash-out points for illicit money, including kidnap ransom.
“In some states, security agencies report that almost 40 percent of kidnap ransom payments pass through informal POS cash-out points. This is no longer a fintech problem; it is a national security emergency,” he said.
He urged the Committee to mandate the Central Bank of Nigeria (CBN) to urgently introduce wide-ranging reforms, warning that failure to act would undermine financial inclusion, erode public trust and destabilise the country’s payment system.
To restore order, Okafor proposed three urgent measures: compulsory Nigeria Police Force–NCCC Cybercrime Clearance Certificates for all POS operators; mandatory CAC registration for POS businesses to ensure traceability; and required membership of recognised trade associations to enforce discipline, training and self-regulation.
He noted that these proposals reflect global best practices in countries such as India, Kenya, Brazil, South Africa and the United Kingdom, where strict oversight, police vetting and continuous certification are used to limit fraud.
“No country leaves its financial system open to millions of operators or hands it to foreigners without strict controls. Nigeria must not be the exception,” he said.
Okafor added that POS services have now spread to almost every household, market and community across the country.
.jpg)
0 Comments
DISCLAIMER
The views and opinions expressed on this platform as comments were freely made by each person under his or her own volition or responsibility and were neither suggested nor dictated by the owners of News PLATFORM or any of their contracted staff. So we take no liability whatsoever for such comments.
Please take note!