By Derrick Silimina
Digital technologies such as mobile wallets via telecom networks are helping to promote financial inclusion in many developing countries.
In Zambia, fraudsters are taking advantage of users and threatening the growth of digital payments.
Sitting unsettled in her business kiosk along Cairo road – one of the busiest highways in Lusaka, Zambia’s capital –, 25-year-old Susan Chembo narrated through tears how she had been conned of her hard-earned money.
“I’m requesting you to send your money via this number,” the message read, then provided a mobile number.
Coincidentally, Chembo had just told her uncle that she would send him money to help clear her goods at the border. She assumed the anonymous message was from her uncle who works as a clearing agent at Kazungula border in southern Zambia.
So, she sent 5,000 kwacha (about $ 285) to the number. Her uncle never received the money. Chembo reported the incident to the police, but the mobile number to which she sent the money was no longer in use. It was a fraud and the perpetrator could not be traced.
Mobile digital technologies and innovations such as mobile wallets are becoming popular in Zambia and helping to promote financial inclusion.
Many Zambians, especially in low resource environments, now rely on their mobile-phone service providers to host virtual “bank” accounts that are easier to access than traditional banking systems.
With its population estimated at 18 million, Zambia’s two largest mobile operators, local units of Airtel and MTN both supply mobile-money services.
In April 2018, MTN announced a concerted effort to raise the number of agents in the country to expand usage of its platform while the state-owned Zamtel also supplies standard mobile-money services through its kwacha brand and smartphone mobile e-wallet app, Zampay.
The Bank of Zambia recently disclosed that mobile-money platforms had recorded increased usage with numbers growing to 8.6 million users by 31 December 2021 compared to around 4.85 million in 2019.
Its statistics showed the number of mobile-money agents in Zambia stood at 47,000 by the end of 2018 compared with 23,000 in the previous year. The number of mobile-money accounts increased from 2.3 million at the end of 2017 to 4.3 million in 2018.
Mobile-money services are a major contributor to financial inclusion in Zambia. However, these platforms have lower security checks than traditional banking systems and have therefore become a target for criminals and fraudsters who take advantage of loopholes to con unsuspecting users.
Raymond Solochi who recently also lost K 500 ($ 30) in a mobile-money scam explains how these fraudsters operate. He says, “these thieves are just using psychology, because they know that at one point or another someone might be sending money especially during pay days.”
If left unchecked, digital fraudsters have the capacity to cripple digital payment platforms. Policy makers in Zambia are therefore taking the issue seriously and devising means to check fraud over digital payment platforms.
“As we continue to migrate customers towards digital technologies, it is important to safeguard customer funds, especially new users of such services. We must ensure that we fully exploit these tools. It is therefore imperative that cyber-fraud incidences are addressed to ensure the gains made so far in financial inclusion are maintained and enhanced,” Denny Kalyalya, governor of the Bank of Zambia, recently told stakeholders at a financial event.
Additionally, the Zambia Information and Communications Technology Authority (ZICTA) is on top of things and says it is alert and always sends messages warning people against posting their contact information on social-media networks and to keep their PIN numbers secret.
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