Paga reduces identity-related fraud by 40% using facial biometrics
Paga at a glance
- Reduction in identity-related fraud
- Decrease onboarding time
Paga is revolutionizing African fintech with a trust-centric approach.
About Paga: Bridging financial access in Africa with trust
Founded by Tayo Oviosu in 2009, Paga is committed to bridging the gap between traditional banking and underserved populations in Africa. They’ve spent the past 12 years developing solutions that address the challenges of sending money within Africa. By building integrations with key financial partners, Paga provides seamless and straightforward ways of transferring funds even to remote areas through an agent network.
Their agent network, 140,000 strong, helps Paga reach users who may not be familiar with or have access to smartphones. They've now processed over nine trillion naira worth of transactions since inception for over 22 million users.
Paga’s relationship with users outside the formal banking system means building trust is essential. They ensure customer interactions are secure and personalised through clear branding and effective communication.
However, challenges exist, such as fraud within the fintech industry, where some individuals try exploiting systems for their gain.
Combatting fraud in the fintech frontier
Fraud is a significant concern in payments, and unfortunately, Paga is no stranger to attacks. Last year, Paga found a user with 150 different Bank Verification Numbers (a typical ID number used by banks in Nigeria), all with the same face.
This fraudster knew that when they used a fintech or bank app, they would have to take a picture and submit their BVN to onboard. Realising that the selfie they took on the app was compared to the image registered with the bank verification number, the scheme became apparent. They had to get a banking or BVN agent to work with them to create 150 BVNS. This allows them open “legitimate” accounts on any fintech app.
While only a few people may try to exploit payment systems like Paga, they can have an enormous impact if successful.
Paga teams up with Smile ID to tackle fraud
Paga needed to develop an onboarding system that confidently verified real users to counter this fraud. Working closely with Smile ID, Paga implemented a Biometric KYC solution which requires a user to take a selfie and compare that picture to the official government photo. As you might have realised, this is precisely the type of onboarding process their fraudster was trying to attack.
To address this we recommended our deduplication detection called Smile Secure. A few key features of this onboarding flow helped Paga reduce fraud by over 40%:
Liveness Checks: Using dynamic photos, Page ensures that individuals engaging with their platform are real humans. These simple photo selfie checks even reduced onboarding friction on their platform, bringing onboarding time down from 2 hours to around 7-9 minutes.
Duplicate Account Prevention: This solution scans all of Paga’s previously checked faces and notifies them if there is a match, reliably indicating if a user has signed up for or attempted to sign up for Paga’s service in the past. Now they can limit duplicate accounts even if the user presents a different name or government ID number for KYC.
Reduction in manual review: With Smile’s onboarding solution, Paga’s customer support team received fewer requests for manual review. In addition, they leverage the Smile ID Portal as a back office tool, allowing their support agents to quickly view a user's KYC information and potential red flags.
Implementing Smile ID has given Paga the confidence that their systems are very secure, a claim they now leverage to grow their brand.
Why Paga partners with Smile ID
How Paga uses Biometric KYC
How paga reduced fraud
“Smile ID's Biometric KYC product allows us to verify the true identity of our users quickly and with extreme confidence without having to choose between high growth and fraud mitigation. Our partnership with Smile ID has given us the compliance tools and flexibility we need to move fast and onboard users swiftly”