Nigeria digital payment fraud falls but costs $19M

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Nigeria’s digital payment fraud losses dropped by nearly half in 2025—but the Central Bank of Nigeria warns that systemic risks, interoperability failures, and a surge in targeted cyberattacks mean the country’s payment infrastructure remains dangerously exposed. Meanwhile, South Africa has published draft rules governing when residents can move cryptocurrency across borders.

Nigeria: Fraud losses drop to $19M—but risks are deepening

The Central Bank of Nigeria revealed that Nigerians have lost ₦25.85 billion ($18.85 million) to digital payment fraud in 2025—a significant decline from the ₦52.26 billion ($38.38 million) recorded in 2024, representing a near 50 percent reduction year-on-year.

The CBN attributed the improvement to enhanced transaction monitoring, tighter controls, and the integration of Bank Verification Numbers (BVN) with National Identification Numbers (NIN)—a key identity-linking initiative that has made fraudulent account activity harder to conceal.

“Though this was lower than ₦52.26 billion in the preceding year, it represented a substantial loss for PSPs,” the CBN stated. “The lower losses in 2025 reflected improvements in monitoring, BVN-NIN integration, and tighter controls.”

Despite the progress, the central bank’s assessment of Nigeria’s payment system is far from reassuring—and the risks it identifies are structural rather than transactional. 

The bank also identified systemic risks, cyber threats, the dominance of systemically important payment service providers, and the activities of unlicensed payment companies as major concerns affecting the financial sector.

The report highlights a critical operational risk tied to a single payment service provider, which could disrupt the entire financial system as reliance on unified payment platforms grows.

The central bank noted that while there are ongoing initiatives to enhance payment system integration, interoperability remains a considerable challenge. The findings also revealed that nearly half of fintech stakeholders remain dissatisfied with the current state of interoperability across the system.

“About 50% of fintech stakeholders continued to rate system-wide interoperability as poor, primarily due to the lack of universal APIs and data-sharing standards,” it said.

In addition, the CBN expressed concerns about the concentration of payment activities among Systemically Important Payment Service (SIPS) providers, reminding that operational failures involving them may result in widespread consequences. They explained that this could trigger a “domino effect,” resulting in financial system disruption as insolvency or operational glitches spread from one payment service provider to others.

The central bank also warned about cyberattacks such as ransomware, data breaches, and credential theft, prompting Nigerians not to transact with unlicensed payment companies, as these entities are not protected by existing regulatory safeguards and could facilitate illicit financial activities.

“Banking and fintech institutions remained prime targets for ransomware, data leaks, and credential theft. Cyber threats in Nigeria are no longer random cybercrimes, but increasingly targeted, organised, and identity-driven campaigns,” it remarked.

“Users of unlicensed PSPs are not covered by regulatory protection that comes with effective oversight and supervision. Unlicensed payment companies are gateways for money laundering which could undermine regulatory efforts and corrode public trust.”

Overall, the CBN report highlighted the growing need to bolster fraud detection mechanisms, improve interoperability in the payment infrastructure, enhance resilience against cyber threats, and intensify regulatory oversight as Nigeria continues to adopt a digital payments landscape.

South Africa drafts cross-border crypto rules

In a parallel development, South Africa released draft guidelines on August 3 that clarify when it is permissible to move digital currency out of the country. The draft “Crypto Asset Manual,” published jointly with the National Treasury and the South African Reserve Bank (SARB), builds on the April proposal to overhaul the country’s capital flow rules.

Under the draft rule, residents in South Africa must go through an authorized provider, and the transaction will be reported to the Reserve Bank’s Financial Surveillance Department (FinSurv).

The regulations are designed to prevent digital currencies from being used as a backdoor to circumvent South Africa’s financial controls and to help authorities disrupt illicit financial flows. Under the proposed draft rules, digital currency transactions may be used for cross-border transfers only when assets move from a local authorized Crypto Asset Service Provider to an offshore provider or a private, non-custodial wallet.

Selling or buying local currency, the rand, through a local provider won’t trigger a report.

Currently, the only individuals allowed to transfer digital currency assets offshore must do so within their existing foreign currency allowances. The SARB clarified that this framework does not recognize digital currency as legal tender and does not yet distinguish between different types of digital currencies, with further research ongoing.

Interested parties are encouraged to submit their feedback by September 30.

The move follows the growing adoption of digital currency in South Africa. The country boasts hundreds of licensed virtual asset service providers, according to blockchain analytics firm Chainalysis. Additionally, leading banks are progressing towards launching digital currency products tailored for institutional clients.

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