N35trn e-payment Industry Vulnerable to Hackers as Lawmakers Neglect Bills

Nigeria’s burgeoning electronic payment industry is being exposed to the exploits of cyber-criminals prowling the digital landscape, with no form of restriction, as a result of delays by the National Assembly to pass critical bills which are expected to boost public confidence and support governments’ quest for better financial inclusiveness.

As many as 100 financial institutions around the world have been hit by one of the most sophisticated cyber attacks to strike the finance industry, said a recent report from Russian security company, Kaspersky. The range and extent of the online attacks, however is still under investigation, with the online security company putting a figure of $1 billion on the combined losses that the financial institutions have suffered.

The value of electronic payments, excluding ATM (Automated Teller Machines) transactions  rose by 150 percent, to N35 trillion in 2014 from N13.687 trillion in 2012, according to the Central Bank of Nigeria (CBN). 

The E-transaction and Financial Ombudsman bills, still idling away in the hallowed chambers of the National Assembly, if passed into law, would provide impetus for greater usage of e-payment services amongst the Nigerian populace.

Besides, the E-transaction bill will provide the legal backing and protection to all stakeholders offering electronic payment services, as well as the consumers who use them. 

“Most of the issues we have with e-commerce seem to revolve largely around the ‘anonymity’ that beclouds the whole process”, said Regha Onajite, chief executive officer, Electronic Payment Providers Association of Nigeria (E-PPAN). According to section 21 (1) of the draft E-transaction bill, a person using e-communications to sell goods and services to consumers shall provide accurate, clear and accessible information about themselves, sufficient to – Identify the legal name of the person, its principal geographic address, and an electronic means of contact.

The draft e-transaction bill, however facilitates prompt, easy and effective consumer communication with the seller; and allows service of legal process. “So if  anyone engaging in an electronic transaction encounters any issues he/she knows that once he makes his complaint to the appropriate authority, the identity behind the transaction can be unveiled and hence the process for reconciliation or arbitration can begin”, Onajite said in an interview.

Dipo Fatokun, director, banking and payment systems department at the CBN, has stressed the need for improvement of security issues around electronic payment systems, in order to boost public confidence. “There is clearly a lack of judicial understanding of the peculiarities of e-payment transactions”, Fatokun said in a paper presentation delivered in Lagos recently.

As at the last time the joint committee held a public hearing on the E-transaction and ombudsman bills in 2014, it was gathered that both bills had passed the second reading. 

Sources told press yesterday that lawmakers  have eyes fixed on the 2015 general elections scheduled to hold in March, and that little attention is currently being paid to other state matters.

With the country pushing for wider national broadband coverage amid government’s inability to expedite action on the proposed bills, the e-payment industry is being exposed to sophisticated cyber attacks.

Plans are underway to connect 50 percent of Nigerians to 3G broadband during the course of 2015, through the ‘Wireless Broadband Infrastructure Upgrade and Expansion Phase 1’, which falls under the National Broadband Plan (NBP).

Between year 2000 and 2013, Nigerian deposit money banks have lost an estimated N159 billion to cyber crimes, says the Nigerian Inter-bank Settlements Systems (NIBSS). Ernst & Young has estimated that the economy loses $200 million annually to cyber crime.

“The legal system is neither adequate nor sufficient to prosecute offenders in the areas of e-transaction and communications  in Nigeria”, said Oluseyi Akindeinde, chief technical officer, Digital Encode, an information security management company. “Whilst the Evidence Act appears to support the admissibility of computer-generated evidence in court, enforcement still remains a major problem because of the various conditions attached”, he said in an interview. Interestingly, the cybercrime bill, which was passed a few month back, by the Senate, is yet to be passed by the House of Representatives. After its passage and harmonisation by the upper and lower legislative houses, the cybercrime bill would be sent to the President, who will assent to it before it becomes a law. The Ombudsman bill basically is to establish the office of the Nigerian Financial Ombudsman to address public complaints. 

This will be an independent body charged with the responsibility to address disputes in the Nigerian financial services sector and for related matters. An Ombudsman will be an independent, impartial and confidential office that receives, investigates or otherwise seeks to resolve complaints from individuals about electronic payment transactions.

Ben Uzor