How Africa’s businesses pay the price for cutting fraud prevention corners

Africa’s $1.2tn digital payments market represents one of the world’s most exciting financial opportunities and sophisticated fraudsters have taken notice. Many businesses, lured by short-term savings, opt for inferior verification solutions. The reality? These choices trigger compounding costs, from mounting fraud losses and regulatory penalties to operational inefficiencies that dwarf any initial savings.

Nowhere is this trend more evident than in Africa’s dynamic markets. Sumsub’s 2024 Identity Fraud Report reveals that fraudulent activity in the region increased by 167% yoy, faster than anywhere else in the world. Nigeria’s 6% average fraud rate and Kenya’s fraud rate growth from 2.75% to over 4% in just three years highlight the steep cost of weak verification. Worsening the problem is that 19% of African businesses still rely on manual verification, leading to lower pass rates and heightened fraud risks.

"Smart verification isn't an expense, it's a value multiplier," explains Hannes Bezuidenhout, VP of Sales for Africa at Sumsub. "Our partners consistently discover that robust systems more than pay for themselves through fraud prevention, operational efficiency gains, and enhanced customer lifetime value. In verification, quality isn't a luxury; it's fundamental economics. In an era where a single breach can cost millions, the question isn’t can we afford better protection? But can we afford the next attack?'’

Sumsub transforms compliance from a cost centre into a competitive advantage, offering:

• 90% fewer errors eliminating manual check risks with advanced AI-powered solutions.
  
• 14,000+ supported IDs enabling instant verification, regardless of script or document type.
  
• 85% higher pass rates boosting user approval and satisfaction with document-free verification.
  
• 220+ countries and territories expand across Africa and beyond without extra operational burdens.

Sumsub’s AI-driven platform is helping African businesses achieve:

• Boost conversion rates to over 90% in high-growth markets like Namibia and Botswana, accelerating user acquisition and revenue growth.
  
• Enable 75% operational cost reduction while securing pan-African expansion through AI-powered verification.
  
• Significantly reduced onboarding process while maintaining strict security standards.

To calculate your potential ROI with Sumsub, try our free ROI calculator.

About Sumsub

Sumsub is a full-cycle verification platform that secures the whole user journey. With Sumsub’s customizable KYC, KYB, transaction monitoring and fraud prevention solutions, you can orchestrate your verification process, welcome more customers worldwide, meet compliance requirements, reduce costs, and protect your business.

Sumsub has over 4,000 clients across the fintech, crypto, transportation, trading, edtech, e-commerce and gaming industries.