Flutterwave Pos Operators Scandal
Background of the Breach.
In October 2023, Flutterwave, a leading payment processing platform, suffered a technical glitch that resulted in the loss of N21.2 billion ($21.2 million) through unauthorized transactions by point-of-sale (POS) merchants.
This incident is considered one of the largest financial breaches in Nigeria’s fintech sector.
About Flutterwave.
Flutterwave is a payment processing company that helps businesses and individuals send and receive payments across borders.
Founded in 2016 by Nigerian entrepreneur Olugbenga Agboola and a team of former bankers and engineers. Flutterwave’s headquarters are in San Francisco and Nigeria.
Flutterwave offers a variety of products and services, including:
Online checkout: A payment ordering system to help grow revenue and improve customer experience
Store: A free ecommerce website that allows users to create a store and sell worldwide
Send money: A service that allows users to send money to loved ones overseas
JavaScript API: A middle layer that allows merchants and payment service providers to integrate with different payment methods and systems
Payment links: Help solopreneurs receive payments
Flutterwave’s mission is to build payments infrastructure to connect Africa to the global economy.
The company accepts over 150 currencies, including Naira, Dollars, Euro, Yuan, and Pounds.
Investigation and Arrests.
The Nigeria Police Force is conducting a thorough investigation into the breach that involved over 9,663 unauthorized transactions. Police reports reveal that the glitch enabled agents to execute transactions exceeding their available balances between October 12 and 13, 2023.
The police have successfully identified 814 Flutterwave POS merchants implicated in the breach and have made arrests based on confessions obtained from suspects.
Flutterwave’s Response.
Flutterwave has stated that the merchants involved in the unauthorized transactions did not provide any service to their clients and were not entitled to the funds that were erroneously transferred.
Flutterwave is actively recovering the stolen funds, and the company is temporarily suspending the accounts where the funds were improperly transferred.
New Arrests and Account Freezes
The police will apprehend an additional 601 account holders suspected of receiving proceeds from the glitch.
The NPF has requested a court order to freeze the accounts of all customers who benefited from the breach
Including those with accounts in Polaris Bank, Sparkle Microfinance Bank, Stanbic IBTC Holdings.
And Also standard Chartered Bank, Sterling Bank, Union Bank, Unity Bank, and Wema Bank.
Court Orders and Reversal of Transactions.
Earlier this year, a court order placed debit restrictions on the accounts involved in the breach.
The police had previously petitioned the court to reverse the transactions, but the judge denied the request, instead demanding that the court hear from other parties implicated in the case.
Investigation and Findings
The police investigation into the bank accounts and phone numbers of the 814 Flutterwave POS merchants involved led to arrests.
According to Flutterwave, the suspects confessed to exploiting the glitch by sending huge sums of money to their friends and relatives, authorities said.
Key Takeaways
- The Nigeria Police Force will arrest 601 individuals implicated in the Flutterwave breach.
- The breach resulted in the loss of N21.2 billion ($21.2 million) through unauthorized transactions.
- The police have identified 814 Flutterwave POS merchants involved in the breach.
- The NPF has requested a court order to freeze the accounts of all customers who benefited from the breach.
- Stolen funds are being recovers from Flutterwave and the accounts where the funds were improperly transferred are being temporarily suspended.
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