E-Financial
Beware! Fraudsters Shop Abroad with Cloned Nigerian ATM Cards
Facts emerged on Tuesday that electronic fraudsters had been duplicating Automated Teller Machine (ATM) cards belonging to Nigerian bank customers and using them to buy items worth millions of dollars from shopping malls in the United States.
Punch newspaper said that top officials of the Central Bank of Nigeria (CBN) said that the development had made Nigerian banks and their customers to be losing millions of naira to the e-fraud.
The development, it was learnt, had become so overwhelming and that top executives of the banks and senior officials of the CBN had to meet with a team of Economic and Financial Crimes Commission (EFCC) operatives led by the director of operations in Abuja on Tuesday.
According to sources close to the meeting, the banks are seeking the assistance of the anti-graft agency to help in arresting some of the fraudsters who are using the duplicated ATM cards in the US.
From the outcome of the meeting, the EFCC is set to collaborate with a sister agency in the US in order to effect the arrest of some of the electronic fraudsters.
The source disclosed, “Banks have been losing a lot of money to electronic fraudster cartels who are using customers’ ATM cards to fraudulently buy items across shopping malls in the US.
“Normally, customers should bear the loss but because banks don’t want the issue to come to the public so that the use of ATM cards will not be discouraged, they settle those customers by paying the money.”
Asked how the Nigerian ATM cards are being duplicated and used in the US, a source close to the development explained, “In Nigeria, we use chip and PIN, but the US still uses magnetic stripe. So, what those fraudsters do is to get the details of a customers’ ATM card, duplicate it and then go to shopping malls and start using it to buy items.
“When they are using the PoS in US shopping malls, all they do is to swipe the card and then payment is made. They don’t need to put any PIN. Through these, items are bought using Nigerian ATM cards.”
According to Punch, an EFCC source, who spoke under the condition of anonymity, confirmed the meeting and noted the anti-graft agency was set to work with the US government to arrest the fraudsters.
A top official in one of the top banks said the incidence of electronic frauds had been on the increase and the development was a source of worry to bank executives.
It was learnt that most of the frauds were being perpetrated in connivance with some bank officials.
The official recalled that prior to 2010 when Nigerian banks were still using magnetic stripe for ATM cards; the issue of using Nigerian ATM cards fraudulently abroad was prevalent.
However, when the banking sector migrated to the chip and PIN system, the problem stopped.
“However, the frauds have started again now in a new form of Nigerian ATM cards being duplicated and used abroad. The incidence is becoming very high now and something has to be done urgently to arrest the trend,” the banker added.
Analysts have said that the increasing incidence of electronic frauds may affect the growth of the cash-less Nigeria initiative.
Mr. Adebayo Adelabu, deputy governor, Corporate Services, CBN, recently said at a conference that the incidence of fraud involving bank officials had been on the increase.
Adelabu, who is a former Executive Director of First Bank of Nigeria, linked the increasing frauds in the banking sector to several issues, including the banks’ poor recruitment procedures and failure to prosecute workers involved in fraudulent activities for fear of reputational risk.
Mr. Abolade Agbola, chairman, Chartered Institute of Bankers of Nigeria (CIBN), Lagos branch, linked the high incidence of electronic frauds to lack of integrity and poor staff conditions in the banking sector.
“When you see the fraud that happens and the trillions of transactions that take place daily, then I think the banks have to take the technology ahead, take the staffing ahead and then create a future for the members of staff so that they can know that they have a future in the organisations and that they can build a future,” he said.
Nigerian banks have resumed processing international tuition payments from Naira accounts through the Central Bank of Nigeria (CBN)’s Form A portal.
Form A is an application form designed by the Central Bank of Nigeria to pay for service transactions (invisible trade).
The form allows customers to purchase foreign exchange at the CBN or interbank rate to make payments for eligible services as predetermined by the foreign exchange manual.
This development comes a month after commercial banks announced the resumption of international transactions on their naira cards.
In an email to customers, Guaranty Trust Bank Limited (GTBank) and Lotus Bank announced that the service is now available for applicants paying undergraduate and postgraduate tuition fees abroad.
“Pay international tuition fees directly from your Naira account,” the notice from GTBank read.
To access the service, customers are required to register and submit their applications via the Trade System Portal at www.tradesystem.gov.ng.
GTBank explained: “Select the ‘Form A’ application for Educational Fees. Choose GTBank as the processing bank, attach required documents, and submit the application.”
Similarly, Lotus Bank stated, “Register on the Trade System Portal. Select Form ‘A’ application for Educational Fees. Choose Lotus Bank as the processing bank, attach required documents, and submit the application.”
In a similar notice, Lotus Bank also informed customers of processing international fees using its facility.
“Register on the Trade System Portal (www.tradesystem.gov.ng). Select Form ‘A’ application for Educational Fees. Choose Lotus Bank as the processing bank, attach required documents, and submit the application,” the bank said.
In 2022, Nigerian banks said international school fees and upkeep requests via Form A will be processed within 120 days due to forex scarcity at the time.
Safaricom, M-PESA and PayPal have announced a strategic collaboration to enable account linking and seamless fund transfers across their networks.
This collaboration aims to empower more than 35 million M-PESA customers and two million businesses and micro traders in Kenya to access PayPal’s global network.
By first linking their PayPal and M-PESA wallets, users can easily transfer funds from their PayPal accounts into their M-PESA wallets, and vice versa. This service is designed to enhance the experience for customers and businesses transacting between the two platforms.
The solution is currently available to Safaricom M-PESA customers in Kenya, with plans to roll out the service to the other M-PESA markets in the future.
“As globalization and digitization continue to reshape how people and businesses connect, our partnership with PayPal is a bold step forward in enabling seamless, worry-free, safe, secure, and inclusive digital payments.
“This collaboration empowers over thirty-five million customers and two million businesses and micro-entrepreneurs across Kenya to participate in the global digital economy by conveniently sending and receiving payments across more than 200 markets. It’s part of our commitment to unlocking opportunities and transforming lives through the power of M-PESA,” said Esther Waititu, Chief Financial Services Officer, Safaricom PLC.
“Building seamless connections between the global economy and local financial ecosystems is crucial to expanding digital financial inclusion,” said Otto Williams, Regional Head and General Manager for the Middle East and Africa, PayPal. “We are thrilled to enable millions of M-PESA’s customers across Africa connect more easily to PayPal’s international customer base.”
For 18 years, M-PESA has driven financial inclusion and bridged the digital divide. With M-PESA Kadogo, introduced in 2016, Safaricom waived fees for transactions of Kshs 100 and below, making digital payments more accessible. Now, through Ziidi MMF, customers can invest from as little as Kshs 100, promoting a culture of saving and financial wellness.
The partnership will tap into the emergence and growing popularity of the gig economy that has seen a rise among Africans accepting online jobs for clients across the world.
It equally marks a growing trend of interoperability between fintech providers with a goal of providing customers with a digital financial ecosystem that meets their needs by combining different capabilities.
PayPal is a leading global payment processor with more than 400 million active PayPal accounts operating across 200 markets, while M-PESA is Africa’s leading mobile money service connecting more than 50 million customers across Africa, 2 million businesses and micro traders, with more than $1.1 billion transacted daily.
Federal government has mandated banks and financial institutions to begin reporting monthly transactions exceeding N25 million for individuals and N100 million for firms to the tax authorities.
Under the new provisions of the Nigerian Tax Act, financial institutions are required to submit quarterly returns to the Federal Inland Revenue Service (FIRS).
The agency will be renamed to the Nigeria Revenue Service (NRS) from January 2026, when the new tax system will take effect.
“Every person who has an obligation to deduct and remit tax under this Act or any other Returns for tax legislation shall render monthly returns to the appropriate tax authority, as specified deduction of tax in the regulation issued for that purpose,” the Act reads.
“Without prejudice to section 142 of this Act, every bank, insurance company, stock-broking firm, or any other financial institution, shall prepare, with or without demand be delivered by the relevant tax authority, quarterly returns to the relevant tax authority specifying the names and addresses of new customers;Nigerian fashion trends
“…and existing customers in the case of (i) an individual, all transactions where the cumulative transactions in a month amount to N25,000,000 or more, or (ii) a body corporate, all transactions where the cumulative transactions in a month amount to N100,000,000 or more.”
Prior to the new tax law, banks were mandated to report deposits of N5 million — a measure intended to curb illicit financial flows, according to TheCable
Experts said the shift is part of efforts to tighten anti-money laundering reporting in the financial sector.
In 2023, Nigeria was listed on the grey list by the Financial Action Task Force (FATF) over deficiencies in tackling money laundering and terrorism financing.
Since then, the country has been making efforts to exit the grey list, which subjects it to increased monitoring by the FATF.
In November 2024, Hafsat Bakari, chief executive officer (CEO) of the Nigerian Financial Intelligence Unit (NFIU), said Nigeria has achieved upgrades in five key recommendations from the FATF.
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