How MTN MoMo lost ₦22.3B in 7 days and sued 18 banks to get it back

The alert came in on May 24, 2022. Inside MTN MoMo’s operations, something is wrong because transactions are moving funny. We are talking hundreds of thousands of them. The system is not malfunctioning in the way a crashed server malfunctions. It is working and processing, but doing something nobody authorised it to do.

By the time the scale became clear, ₦22,300,000,000 had left MTN MoMo’s Payment Service Bank and landed across 8,000 customer accounts in 18 commercial banks. The transfers were not the result of a hack, nor an external breach in the conventional sense. Court filings would later describe them as “erroneously transferred.” A system glitch.

700,000 transactions processed without instruction, without approval, and at a speed that made manual intervention nearly impossible.

MTN MoMo had launched barely a week earlier.

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The Payment Service Bank received its final CBN approval and commenced commercial operations in May 2022, after months of regulatory processes. It was a significant moment for MTN Nigeria, the country’s largest telco by subscribers, finally entering the mobile money market with a licenced financial institution. The expectation was that MoMo PSB would bring millions of unbanked Nigerians into the financial system. The launch was watched closely.

What nobody was watching for was what happened next.

On May 25, one day after the glitch was detected, MTN MoMo shut the service down. The decision was the only one that made sense. The transactions had already gone out, so stopping new ones from processing was the minimum available intervention.

The shutdown was temporary because operations resumed within roughly 24 hours, but the damage was already distributed across 18 institutions and 8,000 accounts, some of them held by customers who had done nothing wrong and received funds they had no way of knowing did not belong to them.

The banks themselves were caught in an awkward position. Reversing transfers into customer accounts without a legal basis exposed them to their own liability. You cannot simply reach into a depositor’s account and withdraw money, even money that arrived there by error, without either the customer’s consent or a court order. Most of the 18 banks needed the latter.

MTN MoMo went to court.

On May 30, 2022, six days after the glitch and five days after the shutdown, MoMo PSB filed a suit at the Federal High Court in Lagos. The case number was FHC/L/CS/960/2022. The originating summons and supporting affidavit were sworn to by CEO Anthony Usoro Usoro.

MTN MoMo, CEO Anthony Usoro Usoro, at the time of the fraud

The filings named all 18 commercial banks, sought declarations that the erroneous funds belonged to MTN MoMo, and requested orders compelling the banks to reverse or return what remained in the affected accounts and to account for any amounts already withdrawn or spent.

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The banks included Access, Zenith, GTBank, First Bank, UBA, and others. Between them, they held the ₦22.3 billion that had moved in 700,000 unauthorised transactions over a matter of hours. Some of it was still sitting in accounts, untouched. Some of it was not.

This is where the story gets harder to resolve. In the days between May 24 and May 30, before the court order came, some of the recipients had spent the money. This is not a surprise because, given the current Nigerian economic and moral reality, if an unexpected credit lands in someone’s account, they are more likely to spend it first, then ask questions later. Or even ask questions first, but spend it anyway.

Once it is spent, recovery requires more than a court order. It requires the individual to have the funds available to return, which, in many cases, they did not.

MTN MoMo’s 2022 FY results

MTN MoMo’s 2022 financial disclosures reported a loss of over ₦10 billion from what it described as “unauthorised transfers caused by a system glitch.” The initial reported figure was approximately ₦10.5 billion. Recovery efforts continued beyond the financial year. By early 2024, MTN had clawed back ₦12.5 billion of the original ₦22.3 billion. The remaining ₦9.5 to N10 billion was absorbed as a loss, fully provided for under a shared services agreement with MTN Nigeria.

The MTN MoMo incident has not received the sustained scrutiny it deserves. It was covered in the days it happened, noted in the annual report, and largely moved past. But the questions it raises remain open.

• What does pre-launch stress testing look like under the CBN’s Payment Service Bank framework, and was it sufficient?
• What is the liability chain when a licenced PSB distributes funds erroneously and recovery requires judicial intervention across 18 institutions?
• And what does it mean for mobile money’s promise of financial inclusion when the infrastructure behind it can move ₦22.3 billion in the wrong direction before anyone can intervene?

The court case is public record, and the affidavit is on file. The numbers are confirmed, and the lessons are still being written.