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Nigeria: MTN MoMo raises alarm over N22bn fraud

MTN Nigeria has charged about 18 banks to court in a bid to retrieve funds mistakenly sent due to a system glitch

MTN Nigeria has reportedly charged 18 banks to court over N22.3 billion mobile money fraud. The recently licensed MTN MoMo has identified fraudulent activities on over 700,000 transactions and has dragged these banks to court in an attempt to retrieve funds mistakenly transferred to about 8000 accounts under these banks. The mobile money operators have since shut down their service to avoid any further liability.

Source: MTN MoMo

Merely three months since acquiring its license to operate as a Payment Service Bank (PSB), things are beginning to look quite challenging for MTN MoMo. Following the recent play of events, MTN will thrive to gain back lost funds to resume operations. However, MTN MoMo will be challenged with earning customers' trust as matters of fraud could affect the number of users on its network. Furthermore, MTN could also be on the verge of straining relationships with potential banking partners in the Nigerian financial industry following the lawsuit.

Focused on getting a positive verdict from the court, MTN will seek to improve its operating system against any further glitches that may grossly affect its business. On the other hand, the banks have requested a court order to initiate a reversal of credits made to their customers. Regardless of the setback, there is still a huge opportunity in the mobile money market in Nigeria and Africa and MTN is certainly committed to exploring these grounds.

Nigeria in focus:

Population: 206.1 million in 2020 as compared to 201 million in 2019

GDP: $432.3 billion compared to $448.1 billion in 2019

GDP per capita: $2,097 in 2020 compared to $2,229 in 2019