The news

• OPay customers have been able to complete card payments without getting debited. Customers of the fintech have racked up a ₦714 million bill following a system glitch
• Reports say Interswitch, the payment switch, mistakenly settled the transactions that were coded as pending as successful.
• The fintech has, however, been able to take legal action to recover the lost funds.

This legal action is an approval from the Federal High Court Lagos to freeze customer accounts across 30 banks.

Per TechCabal, the system glitch that allowed people to pay for items without getting debited happened between December 10, 2023, and March 4, 2023.

In a bid to recover the funds, Chinese-backed OPay contacted those who received value for unsuccessful transactions that are over ₦500,000. These customers were contacted via phone and email, but only 10% obliged according to the report.

OPay said in court documents that "while some customers responded positively to the Applicant’s request and cooperated with the Applicant in respect of the recovery of the Erroneously Retained Credits, some customers have refused, failed, and/or neglected to fund their accounts to enable the Applicant to deduct the value of the Erroneously Retained Credits from their respective accounts.”

The transactions were supposed to be pending, but per reports, OPay said in court documents that “The Switching Company (Interswitch) that facilitated the said card transactions between the Applicant and its cardholders during this period inadvertently settled all the RC 09 transactions as successful,”

Fraud cases such as this reveal a weakness in the security put in place by financial institutions.

Interestingly, the 2023 Annual Fraud Landscape report showed that over ₦17 billion fraud cases hit financial institutions in 2023, however, these figures are probably larger as the cases in the news are more than ₦82 billion.

NIBSS also clarified that not all financial institutions report these cases. It said, 37% of financial institutions complied with reporting fraud incidents while 63% did not. This means they are in breach of the "CBN circular on the Establishment of Industry Fraud Desks."

From Flutterwave's ₦11 billion loss to Interswitch's ₦30 billion chargeback fraud, fraud cases among financial institutions in the country are getting more frequent, an occurrence that needs to be reduced.