Electronic Payment Fraud Trends in Nigeria’s Banking Sector — 2025 Data, Emerging Risks, and Legislative Imperatives

Abstract

In 2025, Nigerian banks and financial institutions recorded losses of ₦25.85 billion to electronic payment fraud, representing a significant 51% reduction from the ₦52.26 billion lost in 2024, according to data presented by the Nigeria Inter-Bank Settlement System (NIBSS) at the 2026 Nigeria Electronic Fraud Forum (NeFF). The number of reported fraud cases also declined to about 67,515 in 2025, continuing a five-year downward trend. These improvements reflect coordinated efforts by regulators, financial institutions, and security agencies, as well as progress in identity management initiatives such as the Bank Verification Number (BVN) and its integration with the National Identification Number (NIN). Notwithstanding these gains, electronic payment fraud in Nigeria is becoming more sophisticated, targeted, and technologically enabled. High-value, low-volume fraud, particularly through internet banking, continues to generate disproportionate losses, while social engineering tactics, insider collusion, SIM swaps, phishing, and account compromises remain dominant threat vectors. Emerging digital channels, including mobile banking and e-commerce platforms, are increasingly exploited by fraudsters, raising concerns that existing safeguards may be outpaced by innovation. Additionally, declining institutional reporting raises the risk of underreported incidents, weakening system-wide situational awareness and response capacity. Unchecked, evolving digital fraud threatens public confidence in Nigeria’s payment systems, undermines financial inclusion objectives, and poses systemic risks to the stability and integrity of the financial sector. While regulatory initiatives have reduced losses, gaps persist in compliance, reporting, enforcement, consumer protection, and data-sharing frameworks. As Nigeria aligns its payments infrastructure with global standards such as ISO 20022 and confronts emerging threats including artificial intelligence–enabled fraud and deep fake social engineering, stronger legislative oversight and forward-looking legal frameworks are essential. The National Assembly is therefore kindly urged to:

1. Convene a public oversight hearing in 2026 through the House Committee on Digital and Electronic Banking to examine drivers of electronic payment fraud, assess existing detection and response mechanisms, and identify regulatory and enforcement gaps, with participation from NIBSS, CBN, NFIU, banks, payment service providers, and security agencies. 2. Mandate quarterly fraud reporting by the CBN and NIBSS to the relevant House Committee, detailing fraud value and volume by channel, institutional compliance with reporting obligations, and enforcement actions taken against non-compliant entities. 3. Review and strengthen existing banking and payments legislation to impose proportionate penalties for under-reporting, provide clear legal backing for industry wide fraud data sharing coordinated by NIBSS, and enhance regulatory accountability. 4. Strengthen identity management oversight by requiring periodic briefings on BVN NIN integration coverage, real-time verification gaps, and funding or legislative constraints affecting full implementation. 5. Enhance consumer protection frameworks by establishing clear timelines for complaint resolution and reimbursement, defining liability-sharing among banks, payment service providers, and customers, and reinforcing redress mechanisms for victims of electronic payment fraud. While the reduction in fraud losses in 2025 signals measurable progress, it does not constitute a definitive victory. Sustained legislative engagement in 2026 is critical to consolidating gains, addressing emerging vulnerabilities, and safeguarding Nigeria’s digital financial ecosystem. Proactive oversight and targeted reforms by the National Assembly will be pivotal to strengthening consumer confidence, preserving financial stability, and supporting the continued growth of Nigeria’s digital economy.