Fidelity Bank reportedly disconnects transfers to Kuda, Opay, others over fraud cases

Fidelity Bank has restricted customer fund transfers to neobanks such as Moniepoint, Kuda, OPay, and PalmPay.

Legit.ng was informed by bank customers that, for over two weeks, they have been unable to conduct transactions via the Fidelity Bank app to other neo banks.

According to reports, this might be part of the bank's effort to reduce the rising number of fraud cases in connection with the fintechs.

Sources said the online banks are reportedly banned due to verification issues. However, the bank asserted that an app update caused the restrictions it is currently carrying out.

Sofia Zab, the chief marketing officer of Palm Pay, reported that Fidelity Bank sent a notice to the new banks. It informed that the restriction would only be in place until the upgrade was finished.

The situation may be due to rising fraud A source informed Tech Cabal that the traditional bank decided in response to increased fraud losses brought on by a lack of strict customer KYC and due diligence procedures.

Fintech companies in Nigeria are renowned for their easy account-opening processes, which enable anyone, regardless of comfort level, to open an account. Although this has helped to increase financial inclusion in the nation over time, there are claims that because fraudsters can readily use the channel, it is increasing the number of fraud cases.

Since the beginning of the year, there have been reported cases of fraud and cyberattacks, which have caused fintech companies to suffer enormous losses.

BusinessDay recently reported how fintechs have become a tool in N14 billion fraud in Nigeria. Experts say that the majority of fintech fraud cases go unreported.

Recall that recently, some of the fintechs reported cases of fraud and difficulty in accessing funds. Opay responded to allegations on social media that some of its customers are experiencing unauthorized withdrawals from their accounts. Patricia appointed a trust company in a bid to resolve its N2 billion debt to its customers.

Legit.ng reported that Nigerian banks have lost a massive N9.5 billion to electronic fraud from January to August 2023.

Customers of UBA, Zenith Bank, Access Banks lose N472 million to fraudsters in 3 months

According to a report by the Financial Institutions Training Centre (FITC), bank customers in Nigeria lost N472 million to fraud in the first three months of 2023, Legit.ng reported.

FITC disclosed that there was a total of 12,552 cases of fraud recorded during the period under review.