Types of Mobile Money Fraud

What is Mobile Money?

Mobile Money functions as an electronic wallet linked to the user’s SIM card, allowing transactions like sending, receiving funds, or paying for services without a traditional bank account. Users can deposit or withdraw funds via a network of registered agents.

According to a 2019 report by the Central Bank of West African States (BCEAO), most frauds at Orange Finances Mobiles Senegal (OFMS) involved agents splitting customer deposits into multiple transactions to earn higher commissions.

There were also cases where agents embezzled commissions from cash withdrawals, and clients split merchant payments to gain more mobile credit bonuses.

Fraud in Mobile Money can be hard to detect. Understanding various fraud techniques and leveraging the data logs generated by Mobile Money systems are crucial in combating these frauds.

Types of Mobile Money Fraud

Below are the main types of Mobile Money fraud:

Cash-Out Fraud: Dishonest agents at sales points withdraw money from a user’s account without authorization. This type of fraud is common where agents exploit their position to illegally access and transfer funds, often without the victim realizing until it’s too late.

Phishing Fraud: Involves social engineering techniques, such as fraudsters calling or messaging the victim, claiming that they accidentally sent money to their Mobile Money account. The fraudster then requests the victim return the money, tricking them into sending their own funds.

International Transfer Fraud: Mobile Money accounts are increasingly being used to illegally transfer stolen or laundered funds across borders. Fraudsters exploit the cross-border transfer capabilities of Mobile Money to move illicit funds, making it difficult to trace and recover the money.

Commission Fraud: Agents may split customer deposits into smaller transactions to artificially inflate the commission they receive from the operator. This fraudulent activity not only undermines the operator’s commission structure but can also lead to inflated transaction fees for users.

SIM Swapping Fraud: Fraudsters use social engineering to convince mobile service providers to transfer a victim’s phone number to a new SIM card, allowing them to take over the victim’s Mobile Money account. This type of fraud has become increasingly sophisticated, with criminals often targeting individuals who have high-value accounts.

As of 2023, the risks associated with Mobile Money fraud continue to escalate. In recent years, it is estimated that the financial sector has faced substantial losses, with some reports suggesting that billions of dollars are lost annually due to sophisticated scams targeting Mobile Money services. As technology evolves, fraudsters are constantly adapting, employing increasingly complex methods to exploit system vulnerabilities. Consequently, the need for enhanced security measures and robust fraud detection systems has never been more critical in safeguarding against these threats.

Introducing S-ONE MFS

To effectively combat Mobile Money fraud, Synaptique offers S-ONE MFS, an advanced mobile money monitoring solution designed to protect telecom operators and their users from fraudulent activities. Our solution leverages cutting-edge technology to provide real-time detection and comprehensive analysis, ensuring the integrity of your Mobile Money services.

Protect your business and your customers by exploring how S-ONE MFS can be a game-changer in your fraud prevention strategy.

Download the brochure to learn more about S-ONE MFS.

Outsmarting Wangiri Fraudsters: How AI Data Solutions Protect Telecoms

Today communication is at the heart of global connectivity. Telecom operators play a pivotal role in ensuring that voice and data services reach people, businesses, and nations seamlessly. However, with great power comes great responsibility, and in the world of telecoms, this also means safeguarding against fraudsters who are constantly devising new ways to exploit vulnerabilities.

One such pervasive threat is Wangiri fraud. Named after the Japanese words for “one ring and drop,” Wangiri fraud involves fraudsters making short, enticing phone calls or sending SMS messages to unsuspecting victims. When recipients call back or respond, they are charged exorbitant fees, and the fraudsters reap the profits. This scheme has far-reaching implications, affecting telecom operators, businesses, and end-users alike.

The Cat-and-Mouse Game

The fight against Wangiri fraud is akin to a cat-and-mouse game, with fraudsters continually refining their tactics to evade detection. Traditional fraud prevention methods often fall short in the face of these evolving schemes. Telecom operators have had to seek innovative solutions to tackle this menace effectively.

The Power of AI in Wangiri Fraud Prevention

Enter Artificial Intelligence (AI), the game-changer in Wangiri fraud prevention. AI-driven data solutions are revolutionizing the telecom industry’s ability to detect and prevent this fraudulent activity. Here’s how AI is turning the tide:

Analyzing Call Patterns

AI algorithms analyze massive datasets of call records, identifying patterns and anomalies that would be virtually impossible for human operators to discern. They can swiftly flag potential Wangiri attacks based on call frequency, duration, and other parameters.

Real-Time Monitoring

One of the standout features of AI-driven solutions is their real-time monitoring capabilities. This means that suspicious call patterns are identified immediately, allowing telecom operators to take swift action to block fraudulent numbers or routes.

Predictive Analytics

AI doesn’t just identify ongoing Wangiri fraud; it can also predict potential future attacks based on historical data. This proactive approach enables operators to thwart fraudsters before they even launch their schemes.

Automated Fraud Detection

By automating the detection process, AI frees up human resources to focus on higher-value tasks. This efficiency not only saves time and money but also enhances the overall effectiveness of fraud prevention efforts.

Best Practices for Wangiri Fraud Prevention

For fraud detection managers and telecom operators looking to bolster their defenses against Wangiri fraud, here are some best practices to consider:

  • Invest in AI: Embrace AI-driven solutions that can adapt to new fraudster tactics.
  • Collaborate: Engage in collaborative data sharing with industry stakeholders and other telecoms.
  • Continuous Learning: Stay informed about emerging Wangiri fraud trends and threats.
  • Proactive Monitoring: Implement real-time monitoring to catch fraud in action.
  • Customer Education: Educate customers about Wangiri fraud and how to avoid falling victim.
  • Regular Audits: Conduct regular audits of your network to identify vulnerabilities.

Preparing for the Future

The landscape of Wangiri fraud continues to evolve, but with AI-driven data solutions, telecom operators can stay one step ahead of fraudsters. As technology advances, so too does our ability to protect the integrity of global telecommunications networks. Through proactive measures and innovative solutions, we can outsmart Wangiri fraudsters and keep the lines of communication clear and secure.

Wangiri fraud is a persistent threat in the telecom industry, but it’s not one that operators have to face alone. AI data solutions offer a powerful defense, providing real-time monitoring, predictive analytics, and automated fraud detection By implementing these solutions and following best practices, operators can protect their networks, customers, and bottom lines from the ever-evolving tactics of Wangiri fraudsters.

Introducing S-ONE FRAUD Your Shield against Wangiri fraud?

In the fight against Wangiri fraud, synaptique offers a powerful  data solution S-ONE FRAUD .

How S-ONE FRAUD Works? 

  • Real-time Alerts: Immediate notification of potential fraud.
  • Fraudster Database: Constantly updated databases of known fraudsters and scam numbers.
  • Machine Learning Models: Evolving models that adapt to new fraud tactics.
  • Integration with Operator Systems: Seamless integration with existing telecom infrastructure.
  • Scalability: Solutions that can handle high volumes of data and adapt to network expansion.

Download the S-ONE FRAUD Wangiri brochure to uncover the full spectrum of benefits and features of the solution.

Key Metrics for Measuring Mobile Money Activity

Mobile Money transfers are typically conducted through an agent who takes the customer’s cash and credits the customer’s Mobile Money account with the corresponding amount. This system enables users to perform financial transactions without the need for a traditional bank account, promoting greater accessibility and convenience.

Key Metrics for Measuring Mobile Money Activity

Metrics are essential for evaluating a company’s performance against its objectives. They are often considered qu antifiable measures that, when compared to historical data, can indicate whether a company is trending positively or negatively toward its goals.

Below are some key metrics we use to understand and measure our clients’ data, helping them achieve their objectives:

Registered Accounts

The total number of customer accounts registered with the Mobile Money service.  This metric excludes customers who perform over-the-counter (OTC) transactions without registering an account. In some Mobile Money services, especially those primarily offering OTC transactions, agents facilitate transactions on behalf of customers who do not hold a formal Mobile Money account.

Tracking registered accounts helps in assessing the user base’s growth and the penetration of digital financial services within the target population.

With the increasing push for digital financial inclusion, many regions are seeing a surge in registered accounts as governments and financial institutions promote account registration through incentives and regulatory requirements.

Active Accounts

The number of customer accounts that have been used to send or receive payments, make withdrawals, transfer funds to bank accounts, or make purchases using mobile commerce services within the last 90 days of the previous year.

Active accounts are a crucial indicator of user engagement and the ongoing utilization of Mobile Money services. High numbers of active accounts suggest that users find the service valuable and continue to integrate it into their daily financial activities.

The trend towards increased smartphone usage and improved network coverage has contributed to higher engagement rates, resulting in more active accounts as users leverage additional Mobile Money functionalities like bill payments and mobile savings.

Registered Agents

The number of agents registered to provide deposit and withdrawal services by the end of the year.

Agents are the backbone of the Mobile Money ecosystem, facilitating cash-in and cash-out transactions. Monitoring the number of registered agents helps assess the network’s reach and accessibility, ensuring that customers can easily access their funds.

Expansion of agent networks in rural and underserved areas continues to be a focus, driven by partnerships between Mobile Money providers and local businesses to enhance financial inclusion.

Active Agents

Agents who have conducted at least one transaction in the past 30 days, up to the end of the specified year.

Active agents indicate the operational health and reliability of the Mobile Money network. High numbers of active agents ensure that customers have consistent access to services and that the network remains robust and responsive to user needs.

Enhanced training programs and performance incentives for agents have led to increased activity levels, improving service reliability and customer satisfaction.

Person-to-Person (P2P) Transfers

Simple fund transfers between Mobile Money accounts, initiated and completed by the two parties involved.

P2P transfers are a fundamental feature of Mobile Money services, enabling users to send money to friends, family, or business associates quickly and securely. This metric reflects the platform’s utility for everyday financial interactions.

Integration with social media platforms and enhanced security features have made P2P transfers more seamless and secure, driving higher usage rates.

International Remittances

Cross-border transfers of funds from one person to another, either directly from a Mobile Money account or through intermediaries like Western Union.

International remittances are vital for many users who rely on money sent from abroad to support their families. This metric highlights the service’s role in facilitating global financial connectivity and economic support.

Increased regulatory support and partnerships with international financial institutions have streamlined cross-border transactions, reducing costs and increasing transaction volumes.

Bill Payments

Payments made from a Mobile Money account to a bill issuer or billing organization in exchange for goods and services.

Bill payments represent a significant use case for Mobile Money, allowing users to pay utilities, rent, and other recurring expenses conveniently from their mobile devices. This metric demonstrates the platform’s integration into users’ routine financial activities.

Expansion of bill payment options to include a wider range of services, such as education fees and healthcare payments, has further embedded Mobile Money into essential financial transactions.

Merchant Payments

Payments made to retail or online merchants in exchange for goods or services using a Mobile Money account or platform.

Merchant payments indicate the adoption of Mobile Money as a preferred payment method for both online and offline purchases. This metric reflects the service’s acceptance among businesses and its role in facilitating commerce.

Growth in e-commerce and partnerships with major retailers have significantly boosted merchant payment transactions, enhancing the overall ecosystem’s vibrancy.

Bulk Disbursements

Payments such as salaries, reimbursements, or other large-scale disbursements sent directly to a user’s Mobile Money account via phone codes or SMS.

Bulk disbursements simplify the process of distributing large sums of money to multiple recipients efficiently and securely. This metric is crucial for understanding how Mobile Money is utilized for organizational payments and financial management.

Increased adoption by employers and government agencies for payroll and social welfare programs has driven higher volumes of bulk disbursements, showcasing the platform’s scalability and reliability.

Cash-In

Depositing cash into a customer’s Mobile Money wallet through an agent.

Cash-in transactions are fundamental for users to load their Mobile Money accounts with funds. This metric measures the ease and frequency with which users can add money to their digital wallets.

Innovations such as instant cash-in via mobile apps and expanded agent networks have made depositing funds more convenient, increasing transaction volumes.

Cash-Out

Withdrawing cash from a customer’s Mobile Money account, facilitated by an agent.

Cash-out transactions allow users to convert their digital funds back into physical cash, providing flexibility and ensuring that Mobile Money remains a versatile financial tool.

Enhanced withdrawal options, including ATM integrations and partnerships with retail outlets, have broadened access to cash-out services, driving higher usage rates.

The Importance of Monitoring Mobile Money Metrics

Understanding and tracking these metrics is essential for assessing the performance, growth, and impact of Mobile Money services. By analyzing these indicators, Mobile Money providers can identify trends, optimize operations, enhance user experience, and implement targeted strategies to drive financial inclusion.

Introducing S-ONE MFS

To effectively monitor and analyze Mobile Money metrics, Synaptique offers S-ONE MFS, an advanced Mobile Financial Services monitoring solution. S-ONE MFS leverages cutting-edge technology? AI and Machine learning to provide real-time insights and comprehensive analytics, enabling telecom operators and financial institutions to detect and prevent fraudulent activities, optimize service performance, and enhance user satisfaction.

Our solution offers:

  • Real-Time Monitoring: Continuously track transactions and user activities to identify anomalies and potential fraud.
  • Comprehensive Analytics: Gain deep insights into transaction patterns, user behavior, and service utilization.
  • Customizable Dashboards: Visualize key metrics and performance indicators tailored to your specific needs.
  • Automated Reporting: Generate detailed reports to support decision-making and strategic planning.
  • Enhanced Security: Protect your Mobile Money ecosystem with robust security measures and fraud detection capabilities.

Download our brochure to learn more about how S-ONE MFS can revolutionize your Mobile Money monitoring and analytics.