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By Alfred Ajayi
Once upon a time, queues were a common sight in banking halls across Nigeria as people clutched withdrawal slips, deposit forms, and passbooks, waiting for hours to perform even simplest transactions like checking account balance.
Banking was a serious chore for business owners, students, market women, and civil servants alike because the crude method of transaction disregarded urgent need for cash. Sending money to sick relatives or paying for goods in distant markets meant taking long trips, sending trusted persons with the risk involved, or using unreliable courier services.
However, early 2000s offered a relief as the Central Bank of Nigeria (CBN) started initiating reforms including the establishment of the Nigeria Inter-Bank Settlement System (NIBSS) and other payment infrastructure, while banks keyed into the digital process through introduction of automated teller machines (ATMs), followed shortly by internet banking, mobile banking apps, POS terminals, and USSD codes.
By the 2010s, Nigeria’s fintech landscape blossomed as young tech innovators and startups joined traditional banks to rewrite the financial story. Now with a few taps on their phones, Nigerians pay for purchases made while parents send funds to their children in school.
With digitization, convenience replaced chaos, speed replaced snail-paced processes while access became widened with mobile money agents serving as mini-banks especially in rural communities. Every android phone is now a banking facility with data subscription and unfailing internet connectivity.
Sadly, incessant failed of digitally performed transactions have left millions of Nigerians frustrated. Small businesses lose sales while customers face delays and anxiety, as they spend many hours chasing reversals.
In a country pushing for a cashless economy, these failures feel like betrayal – turning convenience into chaos. Testimonies of Nigerians interviewed across the country affirm the universality of the problem across commercial banks and fintechs.
Uju Lovet’s not for profit, Victorian Clarion Foundation, (VICLAF), often disburses funds to tens of programme attendees through internet banking. She gets unsettled by failed transactions witnessed out of the bulk.
“We pay up to 100 or 200 people after training and lots of them complain of not getting the funds. In the last bulk payment over six months ago, 10 persons have not received their money till now. From our own end, the money was paid but for them, it was not received.
“Also, a partner once paid and every other person received, but I didn’t get mine. It took almost a year before they grudgingly paid me.
Lovet Uju, Executive Director, Victorian Clarion Foundation, (VICLAF)
“The bank said it was hanging and I couldn’t follow up since I didn’t initiate the payments. After series of letters, they reversed the money back to the creditor, who then paid me”.
Many Nigerians have foregone the money especially when little amounts are involved. For them, it is not worth the stress of queuing, filling forms, or facing indifferent bank staff.
Ify Unachukwu, a staff of Anambra Broadcasting Service (ABS) is in this category. Despite finding a huge relief in the digital era, Unachukwu still feels frustrated by increasing spate of failed transactions.
“In December, 2024, I transferred 10000 after two attempts via POS. I was debited twice but I did not get any reversal. There was no reversal and I didn’t pursue a refund. The process is exhausting.
On another occasion, Unachukwu sent 20,000 to a friend who never got the value despite being debited. “The POS machine wrote null – N-U-L-L. I had to pay another money”.
Unlike the first time, the ace broadcaster strived for a refund. “I laid a complaint to the bank but it wasn’t resolved. Due to my kind of work, I couldn’t continue because they keep you standing for hours and you’re not sure of success in one visit”.
Ify Unachukwu, a Broadcaster
Mary Iyabo from Osun State is more aggressive in her attempt for a refund. However, her efforts yielded no result after a failed transaction between a commercial and a fintech.
“On September 17, 2024, I slotted in my card to machine, put in pin and I got debited of N10,000 but my intended recipient didn’t get the money. I waited for a reversal up till today.
“I complained to the financial institution. They gave me 24 hours to wait for a reversal. When that failed, they sent me a dispute form. I filled it but nothing happened”.
“Since then, I have been sending email sometimes two times in a week. They keep saying they are still investigating it. Latest is that the recipient bank has not helped in the investigation,” Iyabo said disenchanted.
Due to series of failed transactions, Lawrence Nwimo, a journalist, is now skeptical about the digital payment methods. “It happens almost all the time,” Nwimo lamented blaming the trend partly on unreliable internet connectivity.
“Some time ago, after eating and drinking with some friends on a weekend, I transferred N8,000 through my mobile app. It wrote error, but I was debited. I paid another cash but I didn’t get that money because I did not pursue the case.
“Also, last year, I wanted to withdraw N6,000 through POS. The machine wrote error again. Fortunately gave me the money on trust but the money was not reversed. I complained to the bank for fours. I became a disturbance to them.
A journalist, Lawrence Nwimo
“It was on my fourth visit that they actually opened their system and said that they actually reversed the money back into my account. It was then I gave the POS girl her money.
From the North-West, North-East and North-Central to the South-South, South-East, and South-West, the reality is a blend of convenience and chaos. Apart from technical glitches, many victims have blamed their ordeals on lackadaisical attitudes of bank staff to their complaints.
Nwimo recalled with fresh disillusionment. “My mother wanted to withdraw N30,000 through POS to pay for tubers of yam she bought. She was told that it didn’t go through. She couldn’t buy the yam again”.
Nwimo’s mother returned unfulfilled having failed to buy the yam not knowing that something more discomforting had befallen her. “She got a debit alert without any reversal up till today. She’s still mourning that loss.
“I went to the bank with her at Umunze after she complained that bank staff are not handling the issue well. I approached the bank manager and they promised to help her get a refund.
“Unfortunately, I couldn’t follow it up and she lost the money. She mourns that loss up till today. When these incidents happen, banks will delay and frustrate you until you forfeit the money. Personally, I am uncomfortable now with the mobile app,” Nwimo lamented.
A Lagos resident, Stanley Offor, has a share of the bitter tale. “I did 5k airtime 2 months ago, it did not go through. I recharge again and it reflected, but I was debited for both transactions. Since then, I’ve complained about it but no good response.
“First, I utilized live chat for like 3 times. The feedback kept saying that it would be resolved in 5 working days. I then went to one of the branches to physically lay my complaint. They said it will be resolved in 2 weeks but up till now, nothing.
Rowland Anitche, a former banker based in Enugu also shared a personal experience. “I once bought meat from a client who has an unshakable trust in me. I transferred money to him. The next day, he told me that he didn’t see it.
“My bank gave me a reference number which he will send to his bank for confirmation. He did so and they told him that no money came in”.
Anitche printed out his statement of account showing the debit of 30,000 and showed to the meat seller. “I felt that my integrity was at stake. On the third day, we went to his bank with my statement. They looked at it, checked their system. They said the money is not there.
“That same day, I went back to my bank, lodged a complaint in an unfriendly manner this time. They started working on it. In the night of that same day or the next day, the issue was resolved.
Impact on digitization
Incessant incidents of failed digital financial transactions erode users’ trust in banks and fintech platforms and deepens safety concerns which had discouraged adoption. For small business owners, market traders, and service providers, they disrupt daily operations and income flow, leading to lost sales and strained customer relationships.
Failures are also blamed on poor digital infrastructure, inadequate investment in technology by banks, and growing pressure on existing systems. Many respondents held the Central Bank of Nigeria (CBN) culpable for failing to hold financial institutions accountable or enforce stricter guidelines to ensure transaction reliability and quick dispute resolution.
They clamour for urgent reforms, improved infrastructure, transparent complaint resolution processes, stronger oversight of banks/fintechs, as well as increased investment in cybersecurity and system efficiency.
Financial analyst offers insight
A financial analyst, Rowland Anitche, held failure to expand and upgrade infrastructure to accommodate increasing volumes of transactions responsible for glitches often witnessed.
“Failed transactions happen mostly during end of the month when banks are closing their books and transactions are going simultaneously.
Financial expert, Rowland Anitche
“Besides, volume of transactions is growing running into trillions of naira but service providers are not upgrading and expanding their existing infrastructure”.
According to him, such glitches should not be heard of at the rate they are in the country. “Digital transactions are expected to be seamless. However, banks easily blame them on NIBSS because NIBSS is not accessible to customers.
“But, NIBSS is just a channel through which payments are made between banks A and B. There is a form of settlement account with zero balance at every point to ensure that there’s no money outstanding. Every money passing through NIBSS is going to a customer’s account.
“Failure means that either of the two banks has dropped the ball because if a transfer is made and there’s no recipient, the money should be reversed. Otherwise, a bank staff somewhere has failed to do his/her job.
Anitche said holding customers’ money for months or years contravenes the Service Level Agreements (SLAs) which prescribe instant reversal even without complaints from customers. “This applies to commercial banks and fintechs,” he noted.
“While CBN has provided all frameworks for payment service providers, it must closely monitor compliance and punish non-compliance.
The Apex Bank must insist that digital payment service providers upgrade their backend infrastructures and they’re free from malware attack, which could disrupt operational efficiency”.
Tech insights offered
Constant failed transactions have also been intrinsically linked to low level of technological infusion. A Lagos-based tech expert, Stanley Offor, unraveled this.
“Actually, no country is entirely immune to transaction failures but the frequency and delayed resolution in Nigeria point more to technological and operational deficiencies.
“Failures arise from network congestion or downtime, especially during peak hours. Legacy infrastructure in some banks cannot handle high transaction volumes.
“API failures or poor integration between banks, fintech platforms, and switching services like NIBSS, lack of redundancy and disaster recovery plans in some systems as well as unstable internet connections on the user or bank’s end and insufficient real-time monitoring tools are other reasons for failure.
“Such failure indicates weak IT infrastructure or outdated software systems, lack of investment in innovation or capacity expansion as well as inadequate risk management and technical oversight”.
According to him, many banks globally have automated systems that flag failed transactions in real-time and trigger auto-reversals within seconds or minutes. “However, Nigerian banks often rely on manual reconciliation or outdated batch-processing systems.
“Banks must upgrade their core banking systems, integrate intelligent automation and real-time reconciliation tools, while also enforcing strict SLAs for transaction reversals, even without customers’ complaints.
“In advanced countries, fiber networks and cloud-based banking systems, ensure more uptime while advanced fraud detection and transaction monitoring are standard. Also, faster interbank settlement systems reduce failure rates.
He acknowledged Nigeria is making progress, but legacy systems, poor coordination, and underfunding in tech upgrades remain major constraints.
Offor explained that Automated Dispute Resolution (ADR) systems, AI-powered monitoring tools that detect and initiate refunds automatically and 24/7 API integrations with NIBSS and other partners can significantly reduce resolution time.
Stanley Offor, Software Engineer
The tech expert attributed the long delays in resolving such issues to manual processes, and lack of integration, or bureaucratic workflows within banks. “With proper automation and infrastructure upgrades, most issues could be resolved in real-time or within minutes.
For optimal efficiency, Offor recommended standardizing real-time APIs across banks and NIBSS for better transaction visibility, joint investment in shared infrastructure upgrades and redundancy measures as well as setting enforceable SLAs for transaction reversals, monitored by regulators.
“There is need for real-time dashboards that show transaction success/failure metrics to both NIBSS and banks open collaboration on cybersecurity, testing, and load simulations to prepare for surges and outages.
For him, Nigerian banks must treat digital reliability as a core part of customer trust and competitiveness.
He called for heavy investment in IT infrastructure, adoption of international best practices in uptime guarantees and resolution speed as well as improved transparency and customer communication when issues arise.
“Ultimately, technology exists to prevent most of these failures. What’s needed is the willingness to invest, collaborate, and prioritize user experience. Regulators banks, fintechs, and NIBSS must work closely to build a resilient digital payment ecosystem,” Offor counseled.
Digitization still the best
Despite the frustrations they recounted, all respondents still preferred the digital methods of payment to the old order. “Will you because of the realities of death in the battlefield, decide not to go to the battle? No. It’s frustrating, but I think digital banking is still the best,” Unachukwu submitted.
They however hope that the issues bedeviling the payment process will be urgently addressed to give Nigerians optimal benefits of digitization. They also want complaints sorted out as within the fastest possible time. These restore customers confidence and encourages other Nigerians who are hitherto hesitant about adoption.
Since failed transactions and failure to resolve them are linked to ignorance, the sources advocated for increased sensitization and awareness creation to help more Nigerians to understand their rights how to pursue redress.
“Once you write a strongly worded complaint to the bank, the job of the customer service officer is on the line and it behooves on him to ensure that that problem is solved.
“On receipt the customer service officer sends the request. After two days, it’s not resolved, he starts shouting and escalates it beyond his superiors. Something must be done.
Regulator not slacking
The CBN has implemented several measures and issued guidelines to enhance the reliability and efficiency of digital financial transactions in the country. For instance, its Regulatory Framework for Mobile Money Services supports the development and regulation of mobile money services, aiming to increase financial inclusion by providing accessible financial services to the unbanked population.
On March 7, 2023, the Apex Bank issued the operational guidelines for open banking which facilitate secure data sharing between banks and fintechs through standardized APIs, promoting innovation and improving customer experience.
There are also the guidelines on operations of electronic payment channels. These set standards for various electronic payment channels, including ATMs and POS terminals, ensuring interoperability and security across the payment ecosystem. The guidelines were reviewed in a circular titled issued on May 29 2020 which mandated all banks and payments service providers, to resolve customer chargeback complaints on electronic channels within stipulated timelines. They prescribe that refunds on disputed/failed POS/Web transactions shall be treated within 48 hours from current 5 days.
The regulation on instant (inter-bank) electronic funds transfer service ensures prompt and secure inter-bank transactions. The regulation mandates an instant Electronic Funds Transfer (EFT) service provider to put a robust Dispute Resolution System (DRS) in place for users.
The EFT service providers are equally expected to develop and circulate user guides to educate and enlighten other stakeholders on its Instant EFT services. This cannot be said to have been done at a rate that increase general knowledge of these digital payment methods among Nigerians.
CBN also gave the guidelines for licensing and regulation of Payment Service Banks (PSBs). Through the guidelines, PSBs are established to enhance financial inclusion by leveraging technology to provide banking services in underserved areas. The goal is a robust and secure digital financial ecosystem that fosters trust and convenience for all users.
The Industry Dispute Resolution System (IDRS), overseen by Nigeria Inter-Bank Settlement System (NIBSS) was introduced in 2024 to facilitate the resolution of transaction disputes among banks and financial institutions. IDRS allows for both single and bulk dispute logging, enabling banks to track, manage, and resolve issues efficiently. The IDRS provides dashboards for monitoring dispute statuses and supports roles for issuers and acquirers to manage chargebacks and transaction reversals.
NIBSS also introduced the auto-reversal mechanism to minimize the impact of failed transactions by automatically reversing failed transactions, reducing the need for manual interventions and expediting the refund process for customers.
There is also the Transaction Query System (TQS) which provides real-time access to transaction data, allowing billers and financial institutions to monitor transactions as they occur. This transparency aids in the swift identification and resolution of failed transactions. Above all NIBSS is in close collaboration with banks. The collaborative approach ensures that disputes are addressed promptly and efficiently.
Lilian Phido, NIBSS’s Head, Corporate Communications, didn’t response to questions sent to her to elicit reactions from the organization. She rather explained, “Our focus is to maintain an efficient payment system. So, speaking to the press or doing interviews or answering questions it’s like very secondary or even tertiary.
“So, any journalist requesting for information about things on the financial payment industry, we encourage to go to the banks. If for any reason we need to respond to any messages, interviews or questions, we go through approval processes.
“So, those questions you sent are being processed. They have been forwarded to the department that’s in charge of the NIP that you’re asking questions on. When they respond, they’re going to secure approvals”.
“Our focus is basically to provide that platform and ensure that the financial system is working and that the banks and other fintechs can leverage on. That’s what our major mandate is,” Phido said.
The financial analyst, Anitche advised, “First, customers owe themselves a duty of care to be very observant, vigilant in use of these platforms. They should ask the right questions and ensure that the account numbers are correct.
“I cannot over-emphasize the need for banks and NIBSS to upgrade and update their infrastructure to accommodate the growing volumes of transactions. Internet connectivity challenge must be fixed.
Respondents appealed to critical players to rise to the challenge and give the country better, sweeter and less strenuous digital payment system.
This report is produced under the DPI Africa Journalism Fellowship Programme of the Media Foundation for West Africa and Co-Develop.
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