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SimplePay might be dead, but the fintech industry faces far bigger threats

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Friday, October 5, 2018

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“We see a future where when you see a Mastercard and Visa logo, a SimplePay logo is stacked right beside them. We want to compete in the big waters in payments and help people change the way they do payments.”

Those were the exact words of Simeon Ononobi, in an interview with Techpoint, a few years ago about the future of his then baby company, SimplePay.

It is however sad that today, three years and four months since the interview, the SimplePay dream isn’t close to being fulfilled.

The trail of SimplePay’s demise is first found on its website, which effectively is no longer operational. Then came a particularly distressing revelation — around the operation of SimplePay — that possibly explains the circumstances surrounding its demise.

“Somebody sets up a website and gets verified on SimplePay. A lot of transactions immediately begin to happen on it, and all of a sudden the account stops existing. It not only turns out such accounts are not real, they’re also being used to commit fraud at a massive scale,” a source close to the matter revealed to Techpoint.

Prior to this shocking revelation, Techpoint had heard through the grapevine that SimplePay was involved in a crisis spanning many years and that users’ monies were trapped with the embattled startup. This prompted us to reach out to SimplePay’s founder, Simeon.

Simeon neither denied nor confirmed the claims. But just seeing that he went as far as promising a post-mortem of SimplePay’s journey, trials and lessons learnt, over the next few weeks, there could be more truth in the matter than not.

On the wider spectrum, this brings the concern of security of online transactions. Since 2014, the Nigerian Inter-Bank Settlement System (NIBSS) has reported an upward trajectory in industry fraud as it concerns mobile and payments.

While web, eCommerce and internet banking related fraud still trail behind ATM, it is expected that, with the rate of increasing fraud in those various channels, they would overtake ATM by 2020.

On this ground, one wonders if everything said about online payments being secure is all just a mirage. That fintechs aren’t reporting these activities and choosing to bottle them up instead is a bigger concern.

In 2013, the Central Bank of Nigeria (CBN) and NIBSS developed the Anti-Fraud Portal with a view of getting banks to report e-payment frauds in real-time. However, for reasons unknown most of these incidents have gone unreported.

Without question, the fate of the industry is hanging in the balance. And acknowledging the problem is just as important as seeking for solutions. For now though, we can hope that the SimplePay post-mortem would answer the many burning questions on people’s minds.

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