Nigeria’s journey toward a cashless economy is gaining momentum, but industry experts are warning that cracks in cybersecurity and declining public trust could slow that progress if not urgently addressed.
These concerns took center stage at the 2026 Payments Forum Nigeria (PAFON), where stakeholders examined how to sustain growth in digital payments while ensuring inclusivity.
The forum, themed “Fair Digital Payments as a Catalyst for Deepening Financial Inclusion in Nigeria,” brought together key players across finance and technology.
While participants acknowledged the rapid expansion of fintech solutions, many stressed that innovation alone is not enough, security must evolve just as quickly to protect users and maintain confidence in the system.
In his keynote address, Chief Visionary Officer of Digital Encode Limited, Prof. Peter Obadare, did not mince words.
He described cybersecurity and electronic fraud as the most pressing challenge facing Nigeria’s digital payments ecosystem.
According to him, the race to roll out new financial products is often leaving behind weak spots that cybercriminals are quick to exploit.
He pointed to common vulnerabilities such as poor system design, weak access controls, and inadequate input validation.
In one example, he referenced a Point-of-Sale deployment where a flawed application failed to prompt PIN authentication, leaving merchants exposed to potential losses.
These kinds of gaps, he explained, often go unnoticed until they are exploited.
Obadare also placed the issue in a global context, noting that cybercrime now costs the world over $10 trillion annually.
If it were an economy, he said, it would rank as the third largest globally.
While acknowledging past regulatory efforts such as Nigeria’s transition from magnetic stripe cards to EMV chip-and-PIN technology he warned that cyber threats have since evolved, with attackers increasingly targeting applications and backend systems.
Beyond security risks, discussions also explored how innovation is reshaping access to financial services. Managing Director of PalmPay, Chika Nwosu, highlighted the growing importance of embedded finance, where financial services are integrated into everyday platforms.
This approach, he said, allows users to carry out transactions seamlessly without needing multiple applications.
For Nwosu, trust remains the foundation of adoption. When transactions are reliable and secure, more people are willing to embrace digital payments.
He added that PalmPay’s agent network continues to play a vital role in extending services to underserved communities.
That point was reinforced by Obioha Oti, National President of the Association of Mobile Money and Bank Agents in Nigeria, who described agency banking as a key driver of financial inclusion, particularly in rural areas.
However, he noted that the sector still faces serious hurdles, including liquidity shortages, unstable networks, fraud risks, and thin profit margins all of which threaten its sustainability.
On the regulatory front, Chike Onwuegbuchi, Chairman of the Nigeria Information Technology Reporters Association (NITRA) and co-convener of PAFON, called for a measured approach.
While regulation is necessary to ensure security and stability, he cautioned that excessive controls could stifle innovation and slow industry growth.
By the end of the forum, there was a clear consensus: Nigeria’s digital payments future will not be secured by innovation alone.
Building systems that are not only advanced but also resilient, trustworthy, and inclusive will be critical to ensuring that the benefits of a cashless economy reach every segment of society.
