How Nigeria’s N13.66bn payment error still haunts NIBSS nearly two years later

Fresh disruptions to Nigeria’s inter-bank payment system this week have revived concerns about the resilience of the country’s fast-growing digital finance infrastructure, nearly two years after a N13.66 billion payment error exposed deep vulnerabilities within the Nigeria Inter-Bank Settlement System (NIBSS) and triggered one of the sector’s biggest transaction crises.

The latest outage, which affected transfers across banks and fintech platforms ahead of the Eid al-Adha celebrations, disrupted wallet funding, delayed remittances and left thousands of customers unable to complete transactions. The incident again placed the NIBSS under scrutiny.

NIBSS functions as the invisible engine behind Nigeria’s digital banking ecosystem. Every day, millions of transfers made through commercial banks, fintech apps, Point-of-Sale terminals and payment wallets pass through its network. Industry operators often compare it to Nigeria’s electricity national grid.

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When it is down, no transfer successfully goes through in Nigeria. The nation’s digital financial network depends on it,” Jide Awe, tech analyst told BusinessDay.

The latest disruption appeared to begin late Tuesday and continued into Wednesday, affecting both incoming and outgoing transactions on several platforms.

Users reported failed transactions and delayed wallet funding, particularly frustrating ahead of the festive period.

KongaPay acknowledged the disruption in a notice to customers.

“We are currently experiencing a temporary issue affecting incoming transfers into KongaPay accounts and outflows. Our partners are working diligently to resolve it as soon as possible,” the company said.

It apologised for the inconvenience and assured users that support teams were working to restore services.

VBank also informed customers that a separate issue affecting access to its mobile application had been resolved after emergency fixes by its technical teams.

Toyota Godwin, a user on X, formerly Twitter, described how a referral to an investment platform turned embarrassing after a large deposit failed to reflect.

“Yesterday, I gleefully referred @investbamboo to a big client. He was super excited and signed up on the spot. He made a deposit of N5.1 million immediately and you guys won’t believe what happened next? Till I left his office, N5.1 million did not reflect. I was so heartbroken,” he wrote.

Nigeria’s digital payment volumes have surged in recent years. Electronic transactions exceeded N1.07 quadrillion in 2024, with the NIBSS Instant Payment (NIP) platform processing nearly 11 billion transactions that year, more than double the volume from earlier periods. This explosive growth, driven by mobile banking, fintech adoption, and a push toward a cashless economy, has placed immense pressure on underlying infrastructure.

Despite this expansion, recurring outages reveal vulnerabilities. Public complaints and status pages from payment processors such as Monnify documented NIBSS-related downtimes in May 2026, including issues with direct debits and mandates.

Similar problems surfaced on May 13, 2026 and around May 20, 2026, affecting outward and inward transfers. These incidents often intensify during high-volume periods like festive seasons, when transaction demand spikes.

A far more costly episode occurred on September 6, 2024. A fault in the NIP platform caused dry posting, a situation where funds were credited to beneficiary accounts without corresponding debits from originating accounts.

The glitch affected 176 accounts across 19 banks and microfinance institutions. NIBSS’s total financial exposure reached N13.66 billion, according to court documents.

The error enabled unauthorised or erroneous transfers, particularly over the weekend. NIBSS detected the issue during routine settlement reviews around September 9, 2024. The company promptly alerted affected banks and requested account restrictions. However, many banks reportedly required court orders before acting, citing legal risks associated with freezing customer accounts without judicial backing.

Nearly two years later, NIBSS has taken legal action at the Federal High Court in Lagos. It is suing multiple banks to recover a portion of the funds, reports cite efforts to retrieve around N4.19 billion still traceable through unauthorised withdrawals.

The company is seeking orders for account freezes, post-no-debit (PND) restrictions, liens on Bank Verification Numbers (BVN), and reversals of any recoverable amounts. Court proceedings remain ongoing, raising questions about how much of the N13.66 billion can ultimately be recovered after such a prolonged delay. Many recipients may have spent the funds in the interim, whether knowingly or not.

This high-profile case is not the first of its kind. In 2023, a NIBSS-related configuration issue contributed to complications in a N21 billion incident involving Flutterwave. Other banks, including GTBank (which mistakenly credited customers with N1.9 billion in October 2024), Wema, Keystone, and Union Bank, have also encountered system failures linked to erroneous or unauthorised transfers.

These events underscore a pattern of technical challenges amid scaling digital operations.

Rakiya Yusuf, director of the Payments System Supervision Department at the Central Bank of Nigeria, highlighted efforts to address single points of failure.

In a December 11, 2025 circular, she directed all acquirers, processors, and Payment Terminal Service Providers (PTSPs) to implement mandatory dual connectivity with NIBSS and Unified Payment Services Limited (UPSL).

The policy requires automatic failover routing and periodic redundancy testing. Institutions were given deadlines extending into 2026 to comply, aiming to improve resilience for PoS and other transactions.

Industry experts point to several root causes. Rapid transaction growth has strained legacy components. Rushed system upgrades, integration issues with third-party providers, and occasional network congestion during peak loads contribute to instability. Nigeria’s digital economy is expanding faster than some supporting systems can reliably handle.

One affected user, Aina Akintola, a student, expressed frustration in local media: “Today is the second time that this is happening and I think it is high time NIBSS sort these recurring issues because it is not too good for our digital payment systems.”

For businesses and individuals, the human cost is tangible. Delayed salary payments, interrupted remittances from abroad, stalled e-commerce transactions, and lost merchant sales erode trust. While most pending transfers eventually clear once systems recover, repeated disruptions can slow the transition from cash to digital methods. Small businesses, which rely heavily on instant transfers and PoS, are particularly vulnerable.

NIBSS has taken steps to modernise. Initiatives include offline payment solutions, the National Payment Stack (NPS), and adherence to standards like ISO 22301 for business continuity. The company also collaborates on innovations such as interoperable QR payments.

Nevertheless, analysts argue that technological upgrades alone may not suffice. Greater structural competition in settlement and switching services, alongside robust redundancy, could distribute risk more effectively.

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The CBN continues to promote financial inclusion and digital payments as pillars of economic policy. Yet the frequency of glitches raises concerns about consumer confidence and the stability required for sustained growth. With NIP already among Africa’s largest instant payment platforms, maintaining reliability is critical as volumes climb further.

Payment service providers typically respond to outages by issuing apologies and directing customers to support channels.

During the latest disruption, KongaPay advised users to contact the help desk. Banks and fintechs often reassure customers that funds remain secure and transactions will process post-restoration.

As Nigeria pursues ambitious cashless goals, the pressure on NIBSS is set to intensify. Success will hinge on full implementation of dual-connectivity mandates, continued investment in infrastructure, enhanced real-time monitoring, and stronger coordination between regulators, banks, and fintech operators.

The N13.66 billion glitch serves as a stark reminder of the financial and reputational stakes involved when systems falter at national scale.

For now, ordinary Nigerians and businesses must navigate occasional inconveniences while hoping that ongoing reforms translate into fewer disruptions.

Nigeria’s digital national grid has powered impressive growth, but its ability to withstand growing demand without faltering will define the next phase of the country’s financial evolution.