Stakeholders in the e-commerce industry have said that a high incidence of fraud has negatively affected the growth of the sector.
The industry players aired their views in a statement that was made available to The PUNCH.
The Country Manager for DPO Pay, pan-African payment service provider-Henry Owolabi, noted that fraud has become a complex challenge, “Costing the local economy hundreds of millions of US dollars each year.”
According to him, this is “hurting the growth of a promising e-commerce sector because players across the ecosystem are nervous about losing money – merchants because of the chargebacks they face, and shoppers are worried about sharing their card details in case they have their accounts compromised.”
Owolabi further stated that the result of the rise in fraud is a population that has become wary of shopping online. He said research conducted by his company has found that around 60 per cent of users would rather opt for pay-on-delivery options than share their card details when using online payment options.
He added, “This loss of confidence in the payment systems impacts e-commerce growth. Users are missing out on a low-friction customer experience because of the far-reaching security and control options deployed in order to safeguard customers.
Online sales can still take place but they are happening in a less-than-optimal environment. E-commerce is seen as high risk by shoppers, impacting sales, and new merchants are wary of entering the market, cutting off earning potential for young entrepreneurs.”
Also speaking, the Managing Director, Network International, Nigeria, Adelola Agbebiy said payment service providers and their technology partners must ensure that they do everything they can to keep merchants and shoppers safe. This, he said, includes employing real-time risk monitors, specialist risk teams, smart pattern identification, real-time payment confirmation and around-the-clock fraud monitoring.
A 2021 fraud report from the NIBSS, revealed that incidents of overall fraud attempts in Nigeria between 2019 to 2020 increased by 187 per cent, with web accounting for 47 per cent, mobile 36 per cent, ATM terminals 9per cent, and POS terminals seven per cent.
Also, in March 2023 the Nigeria Deposit Insurance Corporation warned that fraudsters are getting more creative, requiring extra vigilance from the Nigerian public.
