- On February 6, 2022, hackers walked away with over US$4 million from Africa’s star fintech, Flutterwave.
- Nigerians have been experiencing a shortage of cash ever since the government introduced the new naira policy
- Flutterwave, however, insisted that there was no compromise in their systems, despite freezing customer accounts.
- In July 2022, the assets recovery agency confiscated US$11.8 million from companies and individuals under the guise of investors and agents operating on Flutterwave
In this age of technological advancement, hackers are thriving in the tech environment. On February 6, 2022, hackers walked away with over US$4 million from Africa’s star fintech, Flutterwave. The money was transferred from Nigerian accounts and the technical team claims that it is still working to freeze the accounts where the money was transferred.
However, it is unclear who exactly hacked Flutterwave, the big question being how they will handle their customers who lost their monies.
Who are Flutterwave
Flutterwave was created to be a common payment structure for a fragmented payment set-up in Africa. The company intended to solve the regulations and interconnectivity of currencies in the continent.
The recent hack news came from a letter that the Flutterwave Legal Counsel, Albert Onimole, had written to the police asking them to freeze the destination of the hacked transactions. They however insisted that there had been no compromise in their systems.
The report from Flutterwave read in part:
At Flutterwave, we understand that our customer’s personal and financial information is of the utmost importance. We take this responsibility seriously and understand that any potential security breach can cause anxiety and concern among our customers.
We want to reassure you that Flutterwave has not been hacked. As a financial institution, we monitor transactions through our transaction monitoring systems and 24-hour fraud desk and review any suspicious activity. We collaborate with agencies to keep our ecosystem safe and secure.
They went further and Twitted:
However, the press release from Flutterwave has not been received kindly by Nigerians. Their cries continue three weeks later as they claim their accounts are still held by the fintech. Flutterwave company froze 107 accounts and any transactions that were tagged to the frozen accounts.
Flutterwave in Nigeria worsens the ongoing Naira scarcity
Nigerians have been experiencing a shortage of cash ever since the government introduced the new naira policy. They have had to stand in long bank queues, some for more than two days, to receive their money. Many would think that it is a ripe time for Nigerians to embrace mobile money and online transactions. This is the time that the market is wide open for Flutterwave to dominate.
However, they are worsening the situation by freezing monies on Nigerians who have believed in their vision. The ripple effect is that many customers will lose the trust they have in fintech.
Flutterwave was having a successful run, partnering with companies such as Safaricom, Visa, Pesapal, Sendy, Sendbox, Mastercard, Pesalink, Uber, Jumia, and Airtel, among others, but they appear to be trumping on their accomplishments.
Flutterwave in Kenya receives US$11.8 million freeze
In July 2022, the assets recovery agency confiscated US$11.8 million from companies and individuals under the guise of investors and agents operating on Flutterwave. The monies transacted ghost goods and services, raising suspicion from ARA.
According to media reports, the ARA uncovered that the fintech had concealed information on the nature of its business. They alleged that they provided a payment service platform without a go-ahead from the Central Bank of Kenya.
Upon the release of the statement by ARA, and the freezing of accounts in Equity, Ecobank, and Guaranty Trust Bank, Flutterwave lost a wide base of customers from their second-largest market, Kenya.
As is the trend, the Fintech’s statement read:
“Claims of financial improprieties involving the company in Kenya are entirely false, and we have the records to verify this……We are a financial technology company that maintains the highest regulatory standards in our operations…We remain proactive in our engagements with regulatory bodies to continue to stay compliant.”
With the continued hack reports from Flutterwave, customers are losing their trust in the fintech company, some speculating that the company could be more of a scheme than an SME and MSMEs transactions facilitator.