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MTN Sues 18 Nigerian Banks of $53 Million Mobile Money Fraud

June 29, 2022

Africa’s largest telco, MTN through its Nigerian subsidiary has reportedly taken 18 Nigerian banks to court over a ₦22.3 billion ($53.7 million) mobile money fraud. In a suit dated May 30, MTN is alleging that its recently-licensed mobile money Payment Service Bank, MoMo, has suffered a fraudulent loss from its partner banks. MTN claims that the amount was transferred in error to 8,000 accounts maintained by the 18 banks’ customers.

In the suit, Chief Executive Officer of MoMo PSB, Anthony Usoro Usoro, also claimed that the fraud was committed over a total of 700,000 transactions, over a one-month period. Upon realising the fraud on May 24, MoMo PSB reportedly shut down its service to prevent further liability.

“The transfers were due to the fact that the plaintiff suffered system exploitation which led to the said debits. There is no transaction between the plaintiff [MoMo PSB] and the recipient account holders that warranted the transfer of the funds to those accounts,” Usoro said in the supporting affidavit.

The CEO also mentioned that it was resorting to legal action upon the banks’ insistence that only court orders could bring action for reversal.

The affected banks, listed as defendants in the suit, include Access Bank, Ecobank, Fidelity Bank, FirstBank, First City Monument Bank, Guaranty Trust Bank, Heritage Bank, Polaris Bank, Providus Bank, Stanbic IBTC, Standard Chartered, Sterling Bank, SunTrust Bank, Union Bank, United Bank for Africa, Unity Bank, Wema Bank, and Zenith Bank.

MoMo PSB is now seeking a court’s order for a refund for the ₦22.3 billion ($53.7 million) it claims. “By virtue of the provisions of the CBN Regulation on Instant (Inter-Bank) Electronic Funds Transfer Services, made pursuant to sections 2(D), 33(1)6) And 47(2) of the CBN Act 2007 the plaintiff is entitled to a return of its money and the provision of the information which it requires from the defendants,” the suit read.

This event is coming 2 months after MTN gained approval from the Central Bank of Nigeria to run a payment service bank. It is presently not clear how these actions will affect MTN’s MoMo customers.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

MoMo PBS Limited Formally Commmences Operations in Nigeria

May 20, 2022

The MTN Group has announced that MTN Nigeria’s fintech subsidiary, MoMo Payment Service Bank (MoMo PSB) formally commenced operations. This comes after the company’s successful pilot test that was initiated on 16 May 2022 in commemoration of the GSM operations on 16 May 2001 and the company’s listing on the Nigerian Exchange Limited on 16 May 2019.

MoMo PBS currently has an agent network of over 166,000 active agents and digitised partnership infrastructure. The company says that MoMo PSB will continue to scale its agent network in order to reach Nigerians and remove friction from everyday payment by digitising cash payments.

In addition, the company says in the future MoMo wallets will allow Nigerians in the Diaspora to send money to any phone number in the country, which is an important feature given Nigeria’s ranking as the destination for the highest remittance flow in Sub-Saharan Africa.

Customers can access MoMo by dialing *671# on any network to send money to any phone number in Nigeria and pay their bills as well.

“We are grateful to the Central Bank of Nigeria for their support and guidance through the process,” said Karl Toriola, CEO of MTN Nigeria.

“This is an important milestone for Nigeria in our mission to support the government’s drive towards financial inclusion in Nigeria. Not just for those in urban centres and markets, but also people in rural and remote areas of the country who remain excluded from the financial system,” he said.

MoMo PSB CEO, Usoro Usoro said providing easy to use, accessible, and affordable financial services to all Nigerians is essential to executing CBN’s financial inclusion strategy and the digital inclusion agenda of the Minister of Communications and Digital Economy.

“We look forward to playing our part and are excited about the opportunities to partner with relevant institutions across various sectors to co-create and expand access nationwide,” Usoro said.