As online shopping and payment continue to increase yearly, so have fraudulent activities soared. On this side of the world, fraud is plaguing fintechs and online businesses.
Zambian fintech Union54 cut off a slew of other fintechs from its Virtual dollar card service due to the high fraud rate. Barter by Flutterwave and Busha, both from Nigeria, PayDay (Rwanda) and Eversend (Uganda) all had to suspend their virtual dollar card services.
Newly licensed Mobile Money Payment Service Bank (MoMo PSB), the fintech arm of telecommunications giant MTN, suffered N22B fraud cases in less than a month of operations in another example of how fintechs are battling fraud. A report estimates that mobile-payment fraud is worth about $4b annually, with Kenya and South Africa the most hit as Africa remains vulnerable to online fraud amidst the boom in digital payments.
To further explore the issue of online fraud, fintech giant Stripe recently released a report which offers a comprehensive overview of the state of online fraud. The report analysed data from 2019 to 2022, and although it didn’t explore African businesses, it has lessons that can help fintechs in this region fight this scourge.
These are five things we learned from the report.