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.