In a concerning trend, Point-of-Sale (POS) fraud cases in Nigeria have seen a significant increase in the first quarter of 2024, according to a recent report by the Financial Institutions Training Centre (FITC).
The Fraud and Forgeries Report in Nigerian Banks reveals that POS fraud cases surged by 31.12% compared to the previous quarter.
The number of reported POS fraud cases jumped from 2,683 in Q4 2023 to 3,518 in Q1 2024, accounting for 30.67% of the total 11,472 fraud cases recorded during the period. This rise is attributed to the widespread adoption of POS terminals by merchants and consumers in Nigeria’s cash-driven economy.
Despite the increase in fraud cases, the financial impact has shown a surprising decrease. The total amount involved in POS fraud declined by 37.74%, from N604.91 million in Q4 2023 to N376.59 million in Q1 2024. Moreover, actual losses from POS fraud saw a significant drop of 68.34%, falling from N14.62 million to N4.63 million.
This paradoxical trend of rising fraud attempts coupled with decreasing financial losses suggests improved detection and prevention measures. However, experts warn that continued vigilance is crucial.
The surge in POS fraud comes amid a substantial increase in registered POS terminals. Between Q1 2023 and Q1 2024, Nigeria witnessed a 47.02% increase in POS terminals, adding 1,193,019 new devices. Curiously, despite this growth, POS transaction volumes in Q1 2024 dropped by 19.03% compared to the same period in 2023.
In related news, the Corporate Affairs Commission (CAC) has extended the deadline for POS agents of major fintechs to register their businesses. Originally set for July 7, 2024, the new deadline is September 5, 2024. The CAC states this measure aims to safeguard fintech businesses and customers while strengthening the economy.
However, the Association of Mobile Money and Bank Agents in Nigeria (AMMBAN) has criticized this mandatory registration, viewing it as an attempt to increase tax revenue rather than a protective measure.
