Downside Of Fintech…As Patricia Loses N2bn Deposits, Customers Rush To Liquidate Accounts With OPay, Palmpay, Others

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Downside Of Fintech…As Patricia Loses N2bn Deposits, Customers Rush To Liquidate Accounts With OPay, Palmpay, Others

Downside Of Fintech…As Patricia Loses N2bn Deposits, Customers Rush To Liquidate Accounts With OPay, Palmpay, Others
November 12
20:05 2023

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Patricia, the crypto exchange firm, has committed the irreverent crime of banking. Caught in an unfortunate “breach,” it has lost the hard-earned savings of its teeming depositors, thus ratcheting a N2 billion ($2 million) debt.

The digital asset marketplace said that Bitcoin and Naira assets were lost because of a security breach.

That breach has caused Patricia a huge debt. Small debts are like small shots; they are rattling on every side, and can scarcely be escaped without a wound. Great debts, on the other hand, are like battle cannons, made of loud noise and extreme danger.

Patricia, the cryptocurrency platform, has known affliction in recent times; it said that its program for retail trading, Patricia Personal, had been hacked, but other crypto assets were not affected.

As a result of the breach, Patricia briefly stopped withdrawals on its mobile and web apps to figure out what was happening. But only after it had lost its depositors’ N2 billion in savings.

The situation has left customers agitated, as they’ve been unable to withdraw their funds from Patricia for over six months. Indeed, the die is cast on the digital banker as irate customers besiege its physical office and online platform demanding an immediate refund of their money.

In a bid to resolve a ₦2 billion debt, Patricia has provided an option for its customers to convert their balances into company shares. While some consider it, others have reported unclear discussions regarding potential partnerships with the crypto exchange.

In a message, the company told its users and sellers that their assets were safe, and that work was being done to recover the stolen money. Patricia said it might have become a target for hackers because it became more famous as a Bitcoin exchange platform.

In August, Patricia introduced its native token, PTK, as a means to repay customer funds. However, this move was met with scepticism. Patricia clarified that the tokens were essentially debt tokens (IOUs), meant to acknowledge its debts to customers. Nevertheless, customers reported that their PTK balances remained at zero.

Aside from the security breach and cash flow problems, Patricia’s bosses recently told the company in a company-wide meeting that more people will be let go. Even though about 160 people worked for the retail trade app, sources say some were let go in 2022, but no apparent reason was given.

The company started as a place to swap gift cards, but it has grown quickly and now handles 30,000 daily transactions for about 850,000 users.

In the wake of Patricia’s failings, customers of other digital bankers, like Opay and Palmpay, have begun to experience jitters.

Some customers of the fintech company, OPay, were earlier this month thrown into panicky mode earlier as a video of some people complaining about fraudulent withdrawals surfaced online.

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In the video, some agents of OPay stormed the Alender House Office of the company in the Alausa area of Ikeja, to protest what they described as unauthorized withdrawal from their accounts.

According to them, they had been experiencing frequent unauthorised withdrawals from their accounts and they had complained to the company, but nothing was being done.

They also said they had reported the matter to the police to help them in recovering their stolen money. Balances of their accounts were allegedly removed; some were transferred to other banks, and some were used to purchase airtime, others were transferred to different OPay accounts that they had no dealings with, a spokesperson of the agents stated.

The video triggered worries among customers about the safety of their money in the digital bank. However, a check on the video shows that it first surfaced online in August 2021, which shows that the event was not recent. OPay also reacted to the video, saying it was old.

However, the company’s clarification came too late for some customers who had out of panic withdrawn all their money from the fintech account to avoid falling victim.

And following recent complaints by Nigerians on social media, claiming to have discovered owning an account with OPay without formally registering with the company, the firm has come out to explain its position.

OPay, as a licensed mobile money operator, uses customers’ mobile numbers as their account details. On Tuesday, several people took to the platform, X (Twitter) to complain about sudden ownership of OPay account numbers.

Although OPay has since explained that its findings revealed that some of the complainants opened their accounts around 2019 and 2020,

The Federal Competition and Consumer Protection Commission (FCCPC) has ordered fintech company, Opay to explain account anomalies Nigerians have identified in the last few days.

As a fintech company, OPay uses users’ mobile numbers as their account numbers because it is a regulated mobile money provider. However, it is not yet obvious how individuals who have not contacted the business to register an account are seeing their number as an OPay account with their full identities.

Quoting data from the Nigerian Deposit Corporation (NDIC), TechCabal, an online media platform, stated that between 2020 and 2021, fraudulent activities recorded by deposit banks in Nigeria rose by 44.8 per cent.

Fraud attempts reportedly increased by 50 per cent between the second half of 2020 and the first half of 2022. The first half of 2022 alone recorded a 30 per cent increase compared to the same period in 2021. In the first nine months of 2020, cybercriminals had an astounding 91per cent success rate from over 46,000 attempts.

Perhaps the Central Bank of Nigeria (CBN) will intervene to stabilise the online payment system as part of the ongoing reforms of the apex bank.

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