Nigeria’s Online Vendors Are Paying More, Losing More, Getting Nothing

Nahum opens his phone before he opens his eyes.

Most mornings, it is orders. Payment confirmations. Delivery questions from customers who need medical books and clinic accessories before their next shift. The whole business of Mr. Joe Exchange Platform runs on a screen, a data plan, and trust. But lately, what greets him first is something else entirely. It is loss.

He lost N128,000 to a dropped transaction. Not a scam, not a fraudster with a stolen SIM, just a network that blinked at the wrong moment and swallowed a sale whole. The money left. The goods did not move. And there was nothing, absolutely nothing, he could do to get it back.

“Most of my customers are online based,” Nahum told The Gazette News. “We relate more online. And then with the recent increase in data prices, it has really become uncomfortable for me.”

His story is not rare. Across Nigeria, an estimated 40 million micro and small enterprises depend on mobile data to earn a living, according to figures from the Small and Medium Enterprises Development Agency of Nigeria. A majority of them, some 56 per cent, sell exclusively through social media, with no physical storefront and no fallback, according to a 2023 GSMA survey. These are people for whom the internet is not a convenience. It is the shop floor. And right now, that shop floor is on fire.

Three forces are closing in at once. Data costs shot up after the Nigerian Communications Commission approved a 50 per cent tariff hike in January 2025, the first adjustment in over eleven years. Network quality has not followed. And digital fraud losses hit N52.26 billion in 2024, nearly three times what they were the year before, according to the Nigeria Inter-Bank Settlement System Fraud Report. For a micro vendor with no safety net, no insurance, and no government-backed recourse, each of these problems alone is serious. Together, they are something close to catastrophic.

When the Network Takes Your Money

The NCC announced the tariff adjustment on 20 January 2025, framing it as a necessary correction after eleven years of frozen prices during which naira devaluation, inflation at 34.6 per cent, and imported equipment costs had crushed operator revenues. MTN Nigeria reported a staggering N514.9 billion loss in the first nine months of 2024. Airtel Africa posted an $89 million loss in its 2024 financial year. The argument for a hike was not without logic.

What happened in practice, though, shook the country. MTN initially rolled out increases that exceeded the approved cap, hiking its 15GB weekly plan from N2,000 to N6,000, a 200 per cent jump. The backlash was immediate and national. MTN walked it back with an apology that became its own kind of news, but the 50 per cent approved baseline remained. By mid-2025, the average cost per gigabyte had climbed from N288 to N638, a 122 per cent increase that hit daily-data users like micro vendors far harder than it hit casual scrollers.

Airtel, Globacom, and 9mobile all followed with their own implementations. Airtel’s cheapest monthly plan moved from 1.2GB for N1,000 to 2GB for N1,500, a structural change that looked like a bonus but quietly buried flexibility. For a vendor like Nahum, who needs several gigabytes daily to manage listings, respond to buyers, and process mobile payments, the new monthly data bill approaches N24,000, dangerously close to the national minimum wage. And this is the cost of staying online, not the cost of running a business.

The Nigeria Labour Congress, under President Joseph Ajaero, called the hike “insensitive, unjustifiable, and a direct assault on Nigerian workers.” Consumer groups filed suits. The House of Representatives adopted a motion directing the NCC to suspend the increase. On 21 February 2025, a government-NLC committee agreed to reduce the hike from 50 per cent to 35 per cent. That reduction was never formally published. It was never enforced. As of today, telcos continue charging prices broadly reflecting the full 50 per cent increase.

Making matters worse, paying more has not bought better service. Nigeria’s telecom infrastructure suffered over 1,100 fibre cuts per week on average between April and July 2025, according to Opensignal data, with fibre vandalism responsible for 52 per cent of all mobile network outages. Power failures caused another 28 per cent. MTN alone spent over N11 billion relocating 2,500 kilometres of vulnerable cables, after recording more than 6,000 cable cuts in a single year. The NCC’s own data shows that between 1 and 3.6 per cent of electronic recharge transactions fail outright, representing millions of aborted transactions daily across a subscriber base of 171 million.

For Nahum, one of those failures was his N128,000 sale. For countless other vendors, the numbers are smaller but the pain is proportional. A failed N15,000 transaction means the same thing to someone earning N60,000 a month as a failed million-naira deal means to a larger enterprise. Representative Oboku Oforji warned the House that a 10 per cent increase in telecom costs could reduce small business profitability by up to 7 per cent. At 50 per cent, that arithmetic barely needs explaining.

Fraud That Goes Unpunished

Before the network failures came the fraud. In April 2024, Nahum purchased goods from an online seller, paid upfront, and received nothing. The seller disappeared. The money was gone.

“I reported to several authorities,” he said. “But it has just been void. It affected my business significantly throughout 2024.”

He did not name the platform or the agencies he approached. The Gazette News could not independently verify the transaction or confirm whether any agency formally logged his complaint. What is verifiable is the pattern.

Nigerian financial institutions lost N52.26 billion to fraud in 2024, up from N17.67 billion the year before, according to the NIBSS Fraud Report published in February 2025. Across five years, from 2020 to 2024, fraud losses grew by 350 per cent. The CBN’s own Financial Stability Report for 2024 confirmed a 45 per cent surge in fraud cases, with 70 per cent of losses linked to digital platforms. NIBSS also recorded a 338 per cent increase in attempted fraud between 2023 and 2024 alone. The EFCC Chair has stated publicly that Nigeria loses over $500 million to cybercrime annually.

The EFCC achieved a record 4,111 convictions in 2024, a genuine landmark. But convictions represent major economic cases, the kind involving millions or billions in illicit flows. The Nigeria Police Force’s cybercrime unit recorded 751 arrests but only 14 convictions in 2024, a conviction rate of roughly 1.9 per cent. For a vendor who lost N80,000 to a ghost seller on WhatsApp, the formal justice system offers almost nothing. The UNODC’s 2025 Cybercrime Assessment described “critical gaps including limited technical capacity in law enforcement,” and multiple studies confirm that fraud victims with smaller losses routinely stop reporting because the process costs more time and dignity than the money itself.

What Nahum has done instead is build his own system. He calls it three-way authentication, a process of audio calls, video calls, and text exchanges before he confirms any order. He insists on verifiable delivery terms. He defaults to payment on delivery wherever possible.

“I employ what I call three way authentication,” he explained. “I do audio calls, video calls, and then text exchanges. All these things are a way of authenticating my customers.”

It works, until it does not. Three-way authentication cannot stop a sophisticated fraudster who is patient enough to invest weeks building false trust. Payment on delivery is useless for remote buyers three states away. And none of it protects him against a legitimate transaction that simply collapses mid-transfer because a fibre cable was cut somewhere outside Abuja.

The Policies That Exist Only on Paper

When Nahum talks about what he needs from government, his asks are structural. He wants the NCC to fix reliability, not just set a price. He wants SMEDAN to build a proper security framework for registered online vendors, one that gives micro businesses actual protection against fraud losses. He wants the federal policies that already exist to reach him.

“What would go a long way,” he said, “is having a medium or a platform for small scale online vendors to be able to make safe payment transactions.”

The idea echoes proposals that have circulated in fintech and legal circles for years, an escrow-style or verification-first payment infrastructure designed specifically for informal micro-commerce. Private sector platforms like Vesicash, EscrowLock, and Peppa.io exist, and some are genuinely accessible, but they charge between 1.25 and 5 per cent per transaction, fees that gut the already slim margins of a vendor selling books at competitive prices. No CBN regulation governs the escrow sector at all, a fact confirmed by legal analysts at Pavestones Legal. No federal or state government has built or mandated a transaction protection platform for the segment Nahum represents.

SMEDAN‘s own record makes for uncomfortable reading. Its 2017 survey found a 95 per cent small business failure rate within five years, and the agency’s budget was cut from roughly N40 billion in 2025 to N28.59 billion in 2026, a reduction of nearly 30 per cent. BudgIT’s Tracka platform found that the 2024 budget included N5 billion of SMEDAN’s allocation for distributing vehicles to traditional rulers, and N1.2 billion for operational security vehicles. No publicly identifiable line item existed for digital support or e-commerce protection programmes. A Carnegie Endowment for International Peace study found the agency had functioned largely as a vehicle for political patronage, with MSME-related corruption siphoning over $1 billion from government coffers between 2014 and 2018.

NITDA and its partners launched a National Digital Trustmark in October 2025, a verification badge that certifies a business as legitimate. It is a meaningful step. But the Trustmark does not hold funds, does not protect individual transactions, and does not compensate a vendor after a loss. The NIBSS National Payment Stack launched in June 2025 modernises payment infrastructure broadly, but again offers no escrow-type protection for the informal micro trader. The digital economy now contributes 14.2 per cent of Nigeria’s GDP, overtaking oil and gas. Yet the 40 million micro enterprises that form its largest base remain the most exposed and the least protected of all participants.

The EFCC did not respond to a request for comment on the prioritisation of small-value fraud complaints as of press time. SMEDAN and the NCC also did not respond to requests for comment.

Nigeria’s digital economy is generating numbers that governments and investors like to quote. E-commerce valued at between $5.8 billion and $9.5 billion. Social commerce penetration the highest on the continent. Fintech investment flowing in. But behind those figures is a vendor named Nahum, spending N24,000 a month on data that drops, absorbing a N128,000 transaction failure with no recourse, and running three-way authentication on every buyer because the system that is supposed to protect him has simply not shown up.

He has not stopped selling. He still checks his phone before he does anything else. He still authenticates. He still absorbs.

“There are a lot of policies,” he said, “but most of us online vendors are not feeling them.”

The whole thing don tire people. And until the system catches up with the people it claims to serve, vendors like Nahum will keep paying more, losing more, and waiting.