Nigerian Payment Firm Interswitch Losses N30bn to Chargeback Fraud, Blames Banks, Others

Nigerian Payment Firm Interswitch Losses N30bn to Chargeback Fraud, Blames Banks, Others

  • Merchants fraudulently stole N30 billion from Interswitch, due to a glitch in its system
  • The company has however involved the anti-money laundering agency to recover the fund
  • But it has only been able to only recover one-third of the money that was lost

Legit.ng journalist Zainab Iwayemi has over 3-year-experience covering the Economy, Technology, and Capital Market.

Interswitch has reportedly lost N30 billion to file and chargeback fraud carried out through some merchants.

This was possible due to a glitch in the system of the African payment infrastructure.

Interswitch lost N30 billion to chargeback fraud, hold 54 banks responsible
Interswitch reported N30 billion fraud due to a glitch in its system. Photo Credit: Boonchai wedmakawand
Source: Getty Images

To recover the fund, the company is working with Nigeria’s anti-money laundering agency, the Economic and Financial Crimes Commission (EFCC).

Sources said that the African payments and infrastructure company has only been able to recover around N10 billion out of the amount.

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Interswitch seeks legal action

As part of attempt directed at recovering the fund, Interswitch has involved legal action. The company filed a motion at the courts on the suspected bank accounts.

It wants the court to order 54 banks to place restriction on over 100 bank affected accounts pending when investigation and recovery are concluded

Meanwhile, TechCabal reported that some former interswiutch employee may have taken advantage of vulnerability in the company’s sytem.

Source said one person have however been arrested in connection to the incident.

Earlier, Interswitch in a report revealed that the banking sector lost N12.2 billion to electronic payment fraud in the first half of the year.

It added that N14.3 billion of the N35 billion in attempted fraud recorded in 2022 was actually lost.

Nigerian Banks Lose N9.5 Billion to PoS, Betting Platforms, as E-fraud Soars in 6 Months

Nigerian banks have lost a massive N9.5 billion to electronic fraud from January to August 2023, Legit.ng reported.

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The development comes as Nigeria Electronic Fraud Forum (NeFF), on Friday, August 18, 2023, called for new standards and increased partnerships to curtail the rising cases of electronic fraud.

Nigerian banks have lost a massive N9.5 billion to electronic fraud from January to August 2023.

The development comes as Nigeria Electronic Fraud Forum (NeFF), on Friday, August 18, 2023, called for new standards and increased partnerships to curtail the rising cases of electronic fraud.

Source: Legit.ng

Authors:
Zainab Iwayemi avatar

Zainab Iwayemi (Business Editor) Zainab Iwayemi is a business journalist with over 5 years experience reporting activities in the stock market, tech, insurance, banking, and oil and gas sectors. She holds a Bachelor of Science (B.sc) degree in Sociology from the University of Ilorin, Kwara State. Before Legit.ng, she worked as a financial analyst at Nairametrics where she was rewarded for outstanding performance. She can be reached via zainab.iwayemi@corp.legit.ng

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