Flutterwave Suffers a Glitch, Loses ₦21 Billion

Flutterwave suffered a glitch that led to a ₦21 billion ($26 million as of 2023) loss. The impactful development has instigated an investigation into the case. The investigation report revealed that the Flutterwave’s glitch was caused by an error by the Nigeria Inter-Bank Settlement System (NIBSS), which worsened the fintech’s losses. 

Flutterwave’s Glitch Caused By NIBSS?

It was reportedly said that someone at NIBSS increased Flutterwave’s daily settlement limit from ₦7 billion ($4.2 million) to ₦21 billion ($26.6 million) and forgot to reset it for three months.

Settlement limits come into play when financial institutions (FIs) settle debits and credits.  Settlement is simply defined as money movement from one bank to another. 

Note that Flutterwave’s settlement bank is Wema Bank. 

The bank on June 23, 2022, sent a letter to NIBSS to reduce Flutterwave’s settlement limit from ₦10 billion to ₦7 billion. 

Also Read: Breaking: Flutterwave Loses ₦11 billion in the Current System Hack

Three-Month Delay Lead To Flutterwave’s Glitch 

The instruction raises the question of how Flutterwave’s settlement limit increased to ₦21 billion.

Further investigation on NIBSS revealed that the limit increased when Flutterwave was moved from a static limit to a dynamic limit.

However, the institution failed to include Flutterwave’s code when adjusting the weekday limits, resulting in a three-month delay in reversing the transaction. This delay allowed a glitch to occur, leading to a loss of ₦21 billion.

Also read: Flutterwave Appoints Former Citi Executive as its CFO

According to Techpoint, the total transactions happened within two settlement cycles, the reason why the total exposure exceeded ₦21B. 

Also, the Settlement limit monitoring tool cut off Flutterwave at ₦19Bn, which represented approximately 90% of the limit maintained.

Also read: High Court Declines Motion to Reverse Billions of Naira Withdrawn from Flutterwave in PoS Fraud

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