Monday, June 13,2022

MoMo Payment Service Bank Limited (MoMo PSB), MTN Nigeria’s fintech subsidiary, has in less than a month after commencing operations suffered a massive loss of over N22 billion on its network to erroneous transfers. 

According to court processes cited by our reporter, an aggregate sum of about Twenty-Two Billion, Three Hundred Million Naira (N22,300,000,000.00) which equivalent in United States (US) Dollars is about Fifty-Three Million, Seven Hundred Thousand Dollars (USD 53.7m) was erroneous transferred to accounts maintained by customers of eighteen (18) different banks in the country

MTN’s MOMO PSB through an originating summons dated May 30, 2022 and filled before the Federal High Court, Lagos is seeking the court for a declaration that the deposits of the said aggregate sum of N22,300,000,000.00 allegedly erroneously transferred by the company to the accounts of the customers of the 18 banks having been done in error belong to MTN’s MOMO PSB and not to the customers of the banks.

MOMO PSB among other reliefs is also seeking the court for an order directing the 18 banks to each, individually account for the sums available in their customer accounts and the sums which have been removed by the customers and are no longer available.

Deposing to the affidavit in support of its originating summons the Chief Executive Officer (CEO), MOMO PSB Ltd, Mr. Anthony Usoro Usoro alleged that MOMO PSB Ltd is the bona fide owner of the aggregate sum of N22, 300,000,000.00 which is maintained in its MOMO settlement account.

He maintained that on or about the 24th day of May, 2022, it was noticed that funds had been erroneously transferred from its settlement account to various accounts maintained by the 18 banks.

Anthony in his affidavit further alleged that a total of about Seven Hundred Thousand transactions were processed with credits being made into about Eight Thousand various accounts in the listed 18 banks.

Upon becoming aware of the incident he further noted, MOMO PSB Ltd management responded by immediately shutting down the service to limit the impact and triggered engagement with the banks for the commencement of recovery activities from the accounts of the various beneficiaries in the various banks. The transfers he alleged were due to the fact it suffered a system exploitation which led to the said debits.

The MTN’s MOMO Bank’s boss in his affidavit noted that the banks requested for an order of court mandating them to reverse the credits made into their customers account before they can do so.

If granted the orders sought and the said amount safely returned to the coffers of MOMO PSB, this singular incident would sure give a signal to other non-core banking players seeking to venture into the PSB business that there is a lot to be learnt about banking