Interswitch sues FirstBank, Fidelity, Access, Opay, others over N33.8 billion server glitch loss

Interswitch Limited, a leading payment platform in Nigeria, has filed a lawsuit against Access Bank, FirstBank, Fidelity Bank, Opay, and 50 other financial institutions, seeking to recover over N33.8 billion lost due to a server malfunction.

The case, filed at the Federal High Court in Lagos, involves allegations of funds being illegally received by various banks and financial institutions following a system glitch at Interswitch.

The payment service provider alleges that the malfunction allowed merchants and agents to initiate multiple refunds for successful card transactions, leading to an erroneous settlement of funds into various accounts held with the defendant banks.

Interswitch claims the funds were then transferred to secondary accounts, further complicating the recovery process.

The legal action aims to compel the defendant banks to freeze the affected accounts and return the funds. Interswitch, represented by its lawyer, Emmanuel Okorie, based its lawsuit on several Central Bank of Nigeria (CBN) guidelines.

The company is requesting the court to block accounts associated with the fraudulent transactions and place restrictions on further withdrawals until the full amount is recovered.

The case highlights potential vulnerabilities in the digital payment ecosystem, raising concerns about the security of large-scale financial transactions.

Many of Nigeria’s major financial institutions, including Ecobank, Guaranty Trust Bank, Stanbic IBTC, and Zenith Bank, are named in the lawsuit alongside fintech platforms such as Opay and PalmPay.

Interswitch’s suit comes at a time when the digital finance industry faces increased scrutiny over system reliability and the security of customer funds.

The outcome of the case could set a precedent for how similar incidents involving technical glitches and fraudulent activities are handled in the future.

In response, some of the defendant banks, including Access Bank, have filed counterclaims, disputing the allegations and their involvement in the purported losses.