In Nigeria’s rapidly evolving financial landscape, digital payment systems have become integral to daily transactions. However, the proliferation of fake bank alerts and instances of missing notifications are undermining trust in these systems, GODFREY GEORGE writes
Mrs Chineye Okoro’s decision to only accept cash as a means of payment in her shop started in 2022.
Before 2022, she had no problem accepting bank transfers from customers in her foodstuff shop located in Mile 12, Lagos. Business was brisk, and she prided herself in keeping up with modern payment methods. But that changed when a well-dressed young man walked into her shop one afternoon, picked a variety of household items – beverages, toiletries, and groceries, amounting to N57,000, and asked to pay via a mobile money transfer.
“He looked decent and spoke well,” Okoro recalled, adjusting the scarf on her head as she recounted the experience.
“I didn’t suspect anything. He even acted like he was in a hurry and needed to send the money immediately.”
A few moments later, her phone buzzed. A credit alert popped up on her screen, confirming the transfer. Satisfied, she bagged the items, handed them over, and watched as the young man walked away, leaving her store with a confident stride.
It was not until a few days later that she realised something was wrong. When she tried making a payment from her bank app, she discovered her account balance was far lower than it should have been. Confused, she scrolled through her transaction history but saw no trace of the supposed N57,000 transfer.
Thinking it was a banking error, she visited her bank’s branch along CMD Road in Lagos to file a complaint. But the response she received sent chills down her spine.
“The customer service officer checked my account and told me that no such deposit had ever been made. I was shocked. I showed them the alert, but they shook their heads and told me it was fake,” she said, her voice laced with frustration.
It was at that moment that reality sank in. She had been scammed.
Her shock soon turned to devastation. She broke down in tears right there in the banking hall, overwhelmed by the thought of how easily she had been deceived.
“The thing pain me ehn,” she admitted. “N57,000 no be small money. That was almost all my profit for that week. You no say provision no dey get gain.”
Since then, Mrs Okoro vowed never to accept transfers again.
“If you don’t have cash, abeg go to the next shop,” she said, her voice firm. “I have children to feed. I can’t be losing money because of fraudsters.”
Her decision is not unique. Across Lagos markets, many traders share similar experiences, leading to a growing distrust of digital payments. While financial experts advocate for a cashless economy, incidents like these continue to make market women wary of electronic transactions, further entrenching Nigeria’s dependence on cash.
Several other traders who spoke to our correspondent said they preferred cash.
Most stressed that they would not accept bank transfers for any reason. A young trader, Bisi, who sold fish, said she had been scammed a few times, which made her stop accepting bank transfers from customers.
“My brother, I no dey accept transfers o. See POS (point-of-sale) stands there. Anyone who wants to buy fish should use a POS and give me cash. I don’t want bank palaver,” she said.
Research has shown that fraudsters have developed sophisticated methods to deceive unsuspecting victims by sending counterfeit bank alerts.
These alerts often mimic legitimate notifications, complete with bank logos and official-sounding language, making them difficult to distinguish from genuine messages.
The primary aim is to create the illusion of a completed transaction, prompting the recipient to release goods or services without actual payment.
A notable example is the use of applications like “Flash Fund,” which enable scammers to generate fake credit alerts that appear authentic. These apps, according to Dubawa, Nigeria’s first indigenous independent verification and fact-checking project, exploit vulnerabilities in the banking notification system, allowing fraudsters to defraud merchants and service providers.
The PUNCH reported that the prevalence of fraudulent bank alerts has become a significant concern, with more citizens falling victim to these scams.
The report highlights the need for increased vigilance and improved verification processes to combat this growing threat.
Impact on businesses
The consequences of fake bank alerts are far-reaching. Many businesses, especially small and medium-sized enterprises, have suffered substantial losses due to these scams. For instance, a boutique owner in Lagos, Bola Tinuade, recounted how she released merchandise worth N150,000 after receiving what she believed was a legitimate bank alert, only to later discover that no payment had been made.
“I don’t have any options. I still accept transfers because, these days, nobody carries cash around,” she said.
Such incidents not only result in financial loss but also erode trust between merchants and customers.
Similarly, POS operators have reported instances where customers present fake alerts as proof of payment.
Given the high volume of transactions and the reliance on swift processing, POS operators are particularly vulnerable to such scams.
The Association of Mobile Money and Bank Agents in Nigeria disclosed that fraudsters stole N42.6bn from Nigerian banks in the second quarter of 2024, with a significant portion of these losses linked to fake alerts and related scams.
The issue of missing alerts
In addition to fake alerts, the problem of missing bank notifications poses another challenge. Customers often rely on SMS or email alerts to confirm transactions. However, technical glitches, network issues, or systemic failures can result in these alerts being delayed or not delivered at all. This lack of timely notification can lead to confusion, double payments, or disputes between parties involved in a transaction. For example, in January 2025, the Nigerian Communications Commission authorised the disconnection of Unstructured Supplementary Service Data (USSD) platforms assigned to nine banks due to a N200 billion debt. This action meant that customers of these banks were unable to receive USSD-based alerts or perform mobile banking transactions, exacerbating the issue of missing notifications.
Rise in digital payments in Nigeria
In recent years, Nigeria has witnessed a significant surge in digital payment systems, driven by advancements in financial technology and a push towards a cashless economy. Despite these developments, a considerable segment of Lagos’s market women remains hesitant to embrace digital transactions. This reluctance is primarily attributed to concerns over fraudulent alerts and persistent network issues. Nigeria’s financial landscape has evolved with the introduction of various electronic payment platforms, including mobile money, online banking, and point-of-sale systems. These innovations aim to enhance transaction efficiency, reduce the risks associated with cash handling, and promote financial inclusion. A report by the Central Bank of Nigeria highlights that digital finance leverages technology and data to ensure broader access to financial services.
Financial experts and regulatory bodies have emphasised the importance of verification to combat the menace of fake and missing alerts. The Nigeria Police Special Fraud Unit advises individuals and businesses to confirm transaction details directly with their banks before concluding any transaction. Relying solely on SMS or email alerts without cross-verification can be risky, as these notifications can be manipulated or faked. Banks have also issued warnings to their customers. For instance, Access Bank cautioned account holders to be vigilant and not to rush into delivering goods or services solely based on received alerts. They recommend checking account balances through official banking apps or by contacting customer service to ensure that payments have been successfully processed.
Technological counter-measures
To address these challenges, there is a growing need for banks and financial institutions to implement more robust security measures, experts have noted. Enhancing the encryption of transaction alerts, introducing multi-factor authentication, and developing real-time transaction verification systems can help mitigate the risks associated with fake and missing alerts. Additionally, educating customers on the importance of verifying transactions and recognising potential red flags can play a crucial role in reducing the incidence of fraud. Public awareness campaigns and customer education initiatives can empower individuals and businesses to take proactive steps in safeguarding their financial transactions.
Market women’s reluctance
Despite the potential benefits, many market women in Lagos prefer cash transactions.
Their apprehension towards digital payments stems from two primary issues: fear of fraudulent alerts and network instability.
A digital financial expert, Glory Itoro-Stephen, noted that instances of fake payment confirmations have eroded trust in digital transactions. Market women often recount experiences where customers present falsified alerts, leading to unpaid goods and financial losses.
“This threat of fraud makes them cautious about accepting electronic payments,” she noted.
Itoro-Stephen also mentioned that unreliable network services could delay transaction confirmations, causing frustration for both sellers and buyers.
“In a busy market environment, time is crucial, and any delay can result in lost sales. The Central Bank of Nigeria’s report indicates that despite technological advancements, network reliability remains a significant challenge,” she added.
Socio-economic factors
Investigations by our correspondent showed that several socio-economic elements contribute to the preference for cash transactions among Lagos’s market women.
One of these is the educational barrier. A segment of market women said they lacked the necessary education or digital literacy to navigate electronic payment platforms confidently.
This gap, our correspondent learnt, led to errors or misunderstandings during transactions, further discouraging the use of digital methods. Also, not all market women have access to smartphones or POS devices, which are essential for processing digital payments.
The cost of acquiring and maintaining such technology can be prohibitive for small-scale traders. Further investigations showed that cash transactions have been the norm for generations, and this ingrained habit is challenging to change.
Many traders feel a sense of control and security when dealing with physical currency, a sentiment not easily replicated with digital alternatives.
Survey findings
A survey conducted by our correspondent among 330 traders in key market hubs such as Balogun, Mile 12, Oyingbo, and Tejuosho reveals that 71 per cent of respondents prefer cash transactions over digital payments, citing concerns over fake alerts, delayed confirmations, and poor network connectivity.
This survey highlights the deep-seated mistrust in electronic payment systems among small-scale traders. Many have fallen victim to fraudulent transactions or lost sales due to technical glitches.
The study was intended to involve 500 market women; however, our correspondent was only able to get responses from 330 during the three-month survey period—November, December, and January.
Participants were selected randomly and asked to respond to a questionnaire assessing their experiences with and attitudes toward digital payment systems.
The survey focused on four key areas: frequency of digital payment usage; incidents of fake alerts or fraud; network issues and delayed transactions; and reasons for preferring cash payments.
Frequency of digital payment usage
71 per cent of respondents preferred cash over digital payments. 19 per cent use digital payments occasionally but still have concerns, whereas 10 per cent say they fully embrace cashless transactions.
Incidents of fake alerts or fraud
52 per cent of the market women reported experiencing fake alerts at least once. 27 per cent said they had lost money due to fraudulent digital transactions, and 15 per cent stopped accepting bank transfers entirely after multiple bad experiences.
Network issues and delayed transactions
Findings showed that 64 per cent of traders have experienced delays of over 30 minutes when confirming transactions; 45 per cent stated that poor network services made digital payments unreliable for business; and 32 per cent said they had lost customers who were frustrated with the time it took for payments to reflect in their bank accounts.
Reasons for preferring cash payments
The survey also showed that many traders feel cash transactions provide immediate proof of payment without the risk of fraud.
Unlike digital payments, cash does not require waiting for interbank transfers to clear.
There is also the fear of bank deductions, and some traders believe that frequent electronic transactions could attract unnecessary charges from banks.
Implications and recommendations
A data scientist and economist, Adedayo Adenubi, speaking to the survey, said it underscored the urgent need for improving digital payment infrastructure and enhancing financial literacy among market traders.
He recommended tighter security measures, better network infrastructure, market-specific digital literacy campaigns, and incentives for digital transactions to drive the country’s cashless policy. He said, “Banks and fintech companies should introduce stricter verification methods to prevent fake alerts and fraud. Financial service providers must collaborate with telecom companies to ensure seamless, uninterrupted transactions.
Educating market women on how to detect fraudulent transactions and properly use digital platforms will boost confidence in electronic payments.
Also, banks and fintech companies should offer incentives, such as zero transaction fees or cashback rewards, to encourage digital adoption.”
Market women remain critical to Nigeria’s economy, and their reluctance to embrace digital payments presents a significant challenge to the nation’s financial inclusion goals.
While electronic transactions offer undeniable benefits, building trust, enhancing reliability, and addressing fraud concerns must take priority before market traders fully embrace a cashless system.
- This report is produced under the DPI Africa Journalism Fellowship Programme of the Media Foundation for West Africa and Co-Develop
