In this report, VICTOR AYENI examines how poor services, failed transactions, and blocked accounts are frustrating many bank customers and why Nigeria’s current structures are not sustainable for efficient digital banking
On a hot Wednesday afternoon in July, Folasade Ayoka, an administrative manager in a multinational firm in Ikeja, Lagos, rummaged through her bag looking for her Automated Teller Machine debit card.
Her firm’s Managing Director had just returned from a foreign trip and needed to take some lunch before going to a meeting.
With a sense of urgency, Ayoka picked up her debit card and walked briskly to a restaurant close to the office to purchase food for her boss.
Narrating her experience with Sunday PUNCH, she said the food purchased was worth N6,000 but when she gave her debit card to the food vendor, she ran into a snag.
She said, “When she inserted my card into her Point of Sale machine, it didn’t indicate that it had deducted the amount. The lady told me that the PoS was indicating that my transaction had declined and she told me to go withdraw money from the nearest ATM to pay her. Meanwhile, the food I bought was already getting cold.
“I ran to the nearest machine to withdraw cash but it was showing that it was temporarily out of service because there was no more money in it. Then it occurred to me to make a transfer through my phone but there was no network too. It was as if everything was just against me.
“I went outside, changed my standing position, and did all I could, yet my bank app was not opening. I stood there that day with the sun licking my head and my phone rang as my colleagues called me to ask what happened, reminding me that my boss was hungry and the time for his meeting was close.”
When Ayoka returned to the restaurant and pleaded with the lady to allow her to deliver the food first and make the transfer from there, she complained that she had lost much money to customers who would promise to make transfers at home due to bad bank services but would often fail to honour their promises.
Ayoka continued, “I gave her my name and the department where I worked and assured her that I would return to pay for the food. She gave me an account number and I made a transfer when I got to the office. I also thanked her for her trust and notified her that I had made the transfer.
“Later that day when I went to check my bank app, I realised that the transaction that she said was declined had gone through. My N6,000 was deducted. I sent her screenshots to inform her that I had made two payments to her due to poor network. She replied to me sending her a screenshot that the first transaction was declined but on my end, I saw that the money was credited to her account twice.
“The issue led to a heated argument on the phone. She told me to go to my bank to refund the first money I sent, but that didn’t make any logical sense because I had evidence that I was debited twice.”
With the issue left unresolved, Ayoka called the eatery again the next day, but this time, the owner of the restaurant overheard the back-and-forth argument.
“The woman took the phone from the lady and I explained to her what happened and she advised me to send an email to my bank because a similar thing had happened to her too.
“I sent an email to my bank and surprisingly, after 10 minutes and assured me that they would revert after tracking the transactions. They asked me to give them seven days. After a while, the money was paid back to my account,” Ayoka added.
Like Ayoka, a Lagos-based content creator, Femi Gbadebo, also told our correspondent about a not-too-pleasant experience he had with banking software which was eventually resolved by emails.
Gbadebo said, “I transferred N10,000 to a friend using the app of a particular bank and it showed me that the transaction was declined yet I was debited of that amount. I quickly sent a mail to the bank I use but I didn’t get any acknowledgment or response from them so I just assumed that the issue was going to be rectified.
“Three weeks later, my friend called me on the phone to tell me he never received the money I transferred. It was then I remembered the failed transaction was not refunded by my bank.
“I resent my mail and they credited me the money and the transfer went through. It took the bank three weeks to resolve this issue and I believe if I had not resent an email that would have been the end.”
Pressure on banking services
In an era of digital banking, both Ayoka and Gbadebo’s experiences with faltering bank apps and service glitches resulting in failed or double transactions are not farfetched.
These complaints have reached a crescendo of daily customer feedback on the platforms of many Nigerian banks across social media.
Following the directive of the Central Bank of Nigeria for the swapping of old naira notes for new notes in January, many banks shut out their customers and disabled their ATMs and over-the-counter operations.
Many Nigerians became cash-strapped and opted for mobile banking. Customers lamented increasingly erratic digital services and failed monetary transfers or taking 48 hours or more to deliver.
Aside from the bank apps, pressure also mounted on the Unstructured Supplementary Service Data, an alternative transaction channel, which led to an increase in failed transactions on the channel.
A report by The PUNCH in February showed that Nigeria’s mobile banking usage surged by 230.72 per cent year-on-year in January according to data from the Nigeria Interbank Settlement System, despite multiple reported failures.
Explaining why banking apps failed, the Chairman, Voriancorelli and Cofounder Cellulant, Bolaji Akinboro, noted that while Nigeria’s technology and payment system is vibrant, the country still needed to invest in its infrastructure.
He said, “The way I will look at it is this: what are the failure points? Because there are the payment apps and the digital payment services; the ones we all use to access all this stuff. I think these can carry the pressure.
“The question is the route. If you want to use your app, you need to ride on the mobile backbone. The real issue to me is not the banking layer, it is the communications backbone. Regarding the communications backbone, Nigeria is not investing right in terms of infrastructure.”
Months later, with the availability of naira notes, several bank customers still have sad stories to tell about failed banking services.
Speaking with our correspondent, a pharmacist, James Uche, said, “I have experienced non-refunded monies on several occasions but presently it is no longer as bad as it used to be. Recently, I made a transfer of N1,500 to a friend and I was debited, I saw the alert but the person didn’t get the money.
“This problem has been recurring and I don’t have the luxury of time to go to my bank to complain each time it happens. As we speak, I have about N5,000 that I have been debited but the people I sent them to didn’t receive them and there has been no reversal.
“There was a day in 2021 when I bought some medicines worth N8,000 for a family member. I was debited and it was reversed. Do you know that two years later, out of the blue, I was debited that same money whereas I made no transaction? I think this is their way of pilfering people’s cash because when they take N1,000 from one person and N2,000 from another, they get more profit while the customers are losing.”
Recalling another experience that happened a few years ago, Uche added that he was debited N4,500 which was the last money in his bank account.
He said, “I stayed hungry for almost a week because I had to resort to borrowing money. I went to the bank to complain but they told me they couldn’t track who deducted the money from my account.
“It wasn’t until I stormed there in anger that they traced where the money went and refunded the money the next day. This particular bank improved its services for some years until this year when its services started failing again.
“There are two other banks that I use currently whose services are like instruments of torture. They frustrate and exploit their customers. The only ones I think are reliable are two recent ones commonly used by POS owners,” he added.
An entrepreneur who gave her name simply as Juliet described how a withheld transfer has put her at loggerheads with one of her clients.
“I used a bank app to transfer N27,000 to a client as a business transaction. She didn’t get that money, but my app showed me that it was sent. This issue has led to bitter arguments and verbal exchanges. Why is this bank frustrating me?” she queried.
Scam codes and alerts
Narrating her experience to our correspondent, a fashion designer, Folake Adeleke, said she had gone to a cake shop with her sister one Saturday when she had a failed money transfer.
She said, “We bought a cake of N13,000 and my sister used my ATM card to pay, but the store said they didn’t see the money but my account was debited. We had to make another transfer.
“I was hoping that my bank would reverse one of the transfers by Monday but that didn’t happen, so I complained to their customer service. I went to Twitter (now X) to drop a message for them, unfortunately, I didn’t know the people who replied to me posing as the bank customer representatives were scammers. One of them told me to chat with them on WhatsApp.
“I chatted with the number on WhatsApp and lodged my complaint and they asked me when I made the transaction and I gave them the details they needed. The person on the other end told me that I should dial a code that would help them trace my money and send them an OTP that would be sent to me. I did as instructed.
“The network was bad that day so by the time I sent them the OTP, they said it had expired. Not knowing their true intentions, I messaged them the next day and they asked me how much was in my account and I told them I had N5,000. They repeated the process and immediately after I sent them the OTP, I got a debit alert.
“The N5,000 remaining in my account was removed! That was when my eyes opened. The number blocked me immediately. Someone then gave me the correct customer care number for my bank and I was left on the call with a song until my airtime got exhausted. I was frustrated.”
Not one to throw in the towel, Adeleke called her bank the next day and lodged her complaints. She was assured that the transaction would be rectified within five working days.
“They told me that those scammers would no longer have access to my account but after five working days, I didn’t see any change. The next time I called them, I was angry so I spoke harshly to them on the phone. My money was refunded after four working days,” she added.
Criminals have also been known to use Short Message Service disguised as transaction alerts from banks to defraud unsuspecting victims, especially small-scale traders and PoS operators.
Our correspondent gathered that certain software applications which include Lofty SMS App, Millionaire Fake Bank, Flash Fund App, Money Prank Pro, and Pro and Fake Alert Maker for Android, are used by scammers to make it seem that a person’s account has been credited or debited.
A shoemaker in Ketu-Ikosi, Lagos, Mr Niyi Babajide, said, “I make sandals for sale. This thing happened to me during the period of naira scarcity, when banks had problems with failed transfers.
“Someone came here to purchase sandals to the tune of N15,000 and he claimed to have sent the money to me but he was lying. He showed me his debit alert and kept saying I was the one who hadn’t received the alert.
“Eventually, I took his phone number in good faith because he tried to convince me that it was my bank that didn’t send me the alert. Till today, I never heard from him again. I am sure this is his tactic of scamming people. People use these fake transactions especially if they have your phone number, they will compute a false text message and send it as if it’s coming from your bank.”
Babajide added that many business owners prefer to check their bank apps to be sure they have received a credit or debit alert. “These bank apps are what have been helping people instead of relying just on text message alerts,” he noted.
An egg seller in Magboro, Ogun State, Mrs Bunmi Somoye, also told our correspondent that she was scammed with a fake alert by a customer.
“Someone came here to buy five crates of eggs and lied that it was my bank that didn’t send me an alert. This man sounded so convincing that he had been debited and he showed me his alert.
“When he was becoming petulant, I took down his number so we could call him if I didn’t see the alert. Both the credit alert and the eggs have remained unseen since that day. The phone number he gave me also became unreachable.”
A woman who operates a pub in Isolo told Sunday PUNCH that she no longer accepts transfers from customers since the time of the naira scarcity due to the losses she incurred through scam alerts.
“I don’t accept bank transfers anymore. During that period, many people made away with my money under the guise of failed bank transfers and scam alerts.
“I understand that technology can be unreliable sometimes, but our people too are too dubious. It was by God’s grace that my business didn’t go under. It was so frustrating because these people would come with sweet tongues but they are robbers. I have cursed all of them,” she said.
In a recent report, the Nigeria Inter-Bank Settlement System Plc said there was a need for citizens to check out for misspellings in the credit alerts they receive.
“Check the credit alert you received if it contains your bank. The real bank alert will show you how much you had before the alert and after the alert; have a precise knowledge of how much was in your account.
“If you get an email alert, check the email source and ensure it comes from your bank’s official account and check the authenticity of the mobile app used,” it stated.
Describing her frustration with her former bank, a medical worker in Benin City, Mrs Abidemi Awopetu, told our correspondent that her account was locked by the bank after she transferred N150,000.
The mother of two added that while she got a debit alert on her first account, there was no notification that her other account was credited.
She said, “There wasn’t even any indication that it was blocked. I received no message. I only noticed that they deducted N1,000 and I thought it was the maintenance fee that the bank deducted.
“Three weeks later, I went to withdraw some money from that second account because my children wanted to travel for the summer holiday and I needed to buy some things for them and I needed some money for personal use. I desperately needed the money but my bank told me that my account had been blocked.
“They explained that it was probably because I had not used the account for a while and it was a current account. I asked them for the process to unblock the account and they gave me some forms to fill out and look for referees that will stand in for me to re-open the account.
“Almost every day for a whole week, I was going there and returning their forms and they would give me another form to fill out. I couldn’t withdraw or transfer from that account and I kept asking them about the account that was blocked, and they started to give me excuses that I would have to wait because there was no network.”
After two weeks and nothing was achieved, Awopetu insisted on seeing the bank manager and began to raise an alarm in the banking hall.
“This was the time when my salary wasn’t even coming in so it was so traumatic for me. After they eventually opened my account, I found out that I couldn’t transfer more than N20,000 so when would I withdraw N100,000?
“Two weeks ago, I just went there and withdrew all my money from my account there. That bank’s service is really poor,” she added.
On his part, an Abuja-based teacher, Charles Thomas, said he had four bank accounts which he opened with four new-generation banks, but lamented that the services provided are often discouraging.
“My problem with these banks is unseen alerts. Money will be sent to you and you will not see an alert but as soon as one withdraws the money, the alert will come in.
“There was a time when about N80,000 was sent to my fourth account. I needed that money that same day to give it to my business partner but the bank froze the account saying that the money was too big for the account.
“The issue caused me a serious problem with my business partner. I thought that if the money was ‘too big’ then why couldn’t they return it to me? But they kept my money against my wish. It was a sad experience,” he told our correspondent.
Experts lament weak tech facilities
A report by the Sunday PUNCH in June highlighted the effect of mass resignation and emigration of tech workers on financial institutions across Nigeria.
Many banks have been reported to suffer from poor mobile services as a result of having lost workers to the exodus of tech talents out of the country.
The Chief Executive Officer of Sterling Bank, Abubakar Suleiman, in a meeting with journalists in 2022 lamented, “So many of our very experienced talents especially in the area of software engineering are either leaving the industry or leaving the country.”
However, tech experts point to the need for more digital platforms that would serve as sufficient backbone for more efficient bank services.
A United Kingdom-based software engineer, Mr Henry Erabor, in a phone interview with Sunday PUNCH, explained that many banks are connected to middlemen.
He said, “Some of the issues with mobile apps used by banks in Nigeria have to do with failure in transactions, particularly when you are trying to do a transfer from one bank to another. The issue often boils down to the medium for sending transactions being faulty. These are called Application Programming Interface.
“When a transaction happens, there is an API that manages it within the banks in Nigeria. If the recipient bank does not have a proper connection to the middleman, then the transaction could hang in the air or you end up not getting an acknowledgement on whether the transaction went through or not. It all depends on how the banks interface with these bodies.
“Another problem could also be with the bank’s server. In this case, the only transfer that will be mediated is within the bank but it will fail if it’s going to another bank.
“Maintenance of digital infrastructures could also be another problem. If the infrastructure setup or API is poor, other banks will not be able to connect with them, which will lead to challenges for customers.”
A Fintech expert, Ayo Festus, in a chat with our correspondent, said banks in the country needed to adopt a broader digital framework.
He said, “First of all, the banking industry needs to adopt the framework of the digital economy to enable them to give their customer pool a seamless service. We need to invest more in our digital local content. The majority of these banks lack compliance from Customer Manage Relationships to Enterprise Resource Planning.
“All these need to be looked into in other to allow the technology driving the banking industry to succeed. For example, NIBSS which provides the infrastructure for automated processing, settlement of payments, and fund transfer instructions gets overwhelmed because of traffic from client servers, so we need more platforms to act as backbones.”
However, a senior banker in a new-generation bank, Jonathan Osagie, explained to our correspondent that the government should be blamed for the limited digital infrastructures that many banks are compelled to work with.
He said, “All the banks in the country are under the CBN and as commercial banks, we have to adhere to rules and regulations to avoid being penalised. So, if there are failed transactions and poor services, the first blame should go to the government.
“There are some facilities and machines that need to be replaced in Nigerian banks but when the government fails to provide them or when you submit your proposal requesting for these facilities for efficient services and the government doesn’t supply all you need, there is nothing you can do than to manage what is available.
“What happens in the banks is that limited resources and infrastructures are managed. The banks have experts who handle their different sectors and when there are not sufficient tools to work with to keep the portals up and running, the effects are far-reaching.
“Most of the time, in the morning when you come to work, the portal is good, that’s between 6 am and 8am, but when you start approaching noon, the portal shuts down, and there is nothing you can do except to wait for the portal to come up again. Then when you have hundreds of people trying to access one portal to transact at the same time, there will be problems.”
Osagie added that the government should create an easily accessible and strong digital portal that hundreds of people can utilise for their transactions.
“If the portal is down, the best you can do is to manage the customer. It is not our fault, it is the best we can do,” he added