PalmPay Identifies Solutions To Combating Digital Payment Fraud

PalmPay, a leading neobank, has outlined key solutions to curb digital payment fraud in Nigeria.

This was disclosed by the Managing Director, PalmPay, Chika Nwosu, in a press statement issued on August 27, 2025.

Nwosu stated that with the deployment of PalmPay’s model, it has proven that financial institutions can mitigate fraud through investment in real-time security tools like AI and biometrics while communicating transparently with users.

He emphasized the importance of educating users through awareness initiatives, noting how PalmPay has consistently promoted campaigns that reinforce and complement the app’s security safeguards.

“Strong collaboration with regulators then ties it all together, ensuring compliance and reinforcing trust across Nigeria’s digital payments ecosystem,” he said.

He disclosed that through these approaches, the company has so far combated digital payment fraud and set industry standards for secure fintech operations in Nigeria.

He noted that strong user security habits remain crucial to preventing fraud in digital payments.

While dissecting the challenges of fraud in the digital payment ecosystem, he stated that digital payment fraud in Nigeria has been on the rise, causing a major pain point for millions of Nigerians, who have now turned to mobile banking for reliable and fast transactions.

According to him, incidents such as unauthorized transfers and identity theft have sometimes resulted in accounts being frozen, limiting access to funds.

He, however, noted that some frozen or suspended accounts may not be tied to fraud, stressing that some of the accounts may have suffered the same fate as a result of factors such as suspicious or unusual transactions, unverified identity, or incomplete documentation, requests from regulators or law enforcement, and prolonged inactivity

Asked to speak on why a suspicious transfer gets flagged, the company clarifies that only the amount in question is frozen if the balance covers it, and the entire account is not automatically locked.

According to the company, if the balance is insufficient, the account may be temporarily suspended while investigations are carried out.

He disclosed that the company has adopted a multi-layered approach to preventing fraud in the digital payment system, adding that these include Biometric Authentication and Phone-Binding, AI-Powered Anomaly Detection, and Two-Factor Authentication (2FA).

“With Biometric Authentication and Phone-Binding, it ensures only authorized users access their accounts, while AI-Powered Anomaly Detection opens an opportunity for real-time monitoring that detects unusual activity needed to prevent fraud before it affects users,” he said.

The leading fintech platform emphasized that its robust security features can prevent unauthorized access, but accounts can still be at risk if users share login credentials, OTPs, or personal details.

As Nigeria’s digital payments grow, so do concerns about fraud and frozen accounts. PalmPay is addressing this with stronger security and user education, including campaigns like Anti-Fraud Awareness Week that teach safe transaction practices.

By combining technology, awareness, and compliance, PalmPay empowers users, reduces fraud risks, and reinforces trust in the fintech space.

If you suspect your account has been compromised, you can contact PalmPay’s Customer Service (0201888688) or the Fraud Desk (reportfraud@palmpay-inc.com) immediately.