This finding was published by identity verification solutions provider, Smile ID, in its 2025 Digital Identity Fraud in Africa Report, highlighting critical fraud trends across the continent.

The report uncovers sophisticated fraud tactics exploiting vulnerabilities in fintech platforms and digital ecosystems, accelerated by emerging technologies such as Generative AI, deepfakes, and insider-assisted schemes.

The report also offers clear, actionable strategies to help business leaders protect trust, revenue, and maintain operational stability in 2025.

Drawing on anonymised data from over 110 million identity verification checks conducted by Smile ID across Central, East, West, and Southern Africa in 2024, the report highlights ongoing challenges and opportunities.

The widespread adoption of biometric verification over traditional textual methods has significantly strengthened fraud prevention, driving the overall fraud rate during KYC checks down to 25% in 2024 (a 4-percentage-point decrease).

However, this year-over-year progress has prompted fraudsters to develop more sophisticated attack methods targeting biometric systems, resulting in millions of dollars in fraud losses across key African markets.

Smile ID continues to tackle unique threats African businesses face when onboarding users, such as identity farming, insider-assisted account takeovers, and advanced document forgeries.

The report revealed significant regional variations in fraud methods across Africa. East Africa led in document fraud cases, reporting the highest combined rejection rate at 27% in 2024, driven by the region’s reliance on documents. West Africa emerged as the epicentre of biometric fraud, showing the highest incidents of spoofing and face-match inconsistencies, with notable vulnerability to AI-powered fraud attempts. Central Africa maintained a rejection rate of 22% [up by 3%], while Southern Africa saw rates rise from 9% to 21%, primarily attributed to fraud attempts involving the retiring green book.

Analysis of fraud attempt timing revealed critical patterns:

• Authentication attempts showed four times higher fraud rates compared to registration, indicating a significant rise in account takeover risks.
• Across all African regions, fraudulent activities concentrated between 7 PM and 3 AM GMT, peaking at 11 PM GMT.

Speaking on the report, Mark Straub, CEO of Smile ID, said:

“The future of fraud prevention lies in adaptability. While AI provides fraudsters with powerful new tools, it also helps security practitioners harness global intelligence to counter zero-day attacks and automate processes that were once manual.”

Fintech platforms with weak KYC protocols remain the most vulnerable, as these bad actors use identity farming to create fraudulent accounts that conceal the origins of illicit funds.

Tackling these vulnerabilities requires collaboration between industries, governments, and technology providers to create a safer digital ecosystem.”

The report’s launch builds on the recent introduction of Enhanced SmartSelfie, an advanced biometric verification technology built to withstand advanced fraud attempts, including deepfakes, AI-generated faces, and replay videos. If paired with a unified approach, African businesses can secure their operations, build trust, and drive economic growth.

Founded in 2017, Smile ID has revolutionised identity verification in Africa, completing over 200 million verification checks by November 2024.

As the continent’s leading provider of digital identity verification, fraud detection, and KYC compliance solutions, the company delivers scalable, Africa-focused tools optimised for real-time onboarding, anti-fraud measures, and AI-driven identity verification.

Backed by investors like Costanoa Ventures and CRE Venture Capital, the company catalyses Africa’s digital economy by enabling businesses, governments, and individuals to build trust in underserved markets.

The full 2025 Digital Identity Fraud in Africa report can be downloaded for free here.

The new capital, which brings the total fund raised by Stitch to $27,000,000 to date, will be used by the company to create a financial graph ecosystem across Africa.

The financial graph is an infrastructure for financial building blocks that allow businesses to write code once, launch in multiple markets and scale faster based on interoperability across regions, providers, banks, and other types of financial accounts.

The graph utilises three stages — the pure infrastructural play of connecting financial and bank accounts with an API, the acquisition of merchants and businesses to build use cases and applications on top of that infrastructure and lastly, getting end consumers to link their accounts via these businesses.

The round was led by investment firm, The Spruce House Partnership. New and existing investors who also took part in the round include PayPal Ventures, TrueLayer, firstminute capital, The Raba Partnership, CRE Venture Capital, Village Global, as well as fintech founders and companies such as TrueLayer, founders of Chipper Cash, Quovo and Unit, and Guillaume Pousaz’s Zinal Growth.

Stitch provides solutions for e-commerce companies, marketplaces and fintech, with services necessary for driving financial inclusion and ease of payments across the continent.

Wallet-based companies such as Chipper Cash and Luno; embedded finance providers like ImaliPay; subscription platforms like FlexClub; and payment aggregators like Yoco are some of Stitch’s customers who leverage its services for use cases such as KYC & onboarding, personal and business financial management, lending, wallet top-ups and e-commerce checkouts. 

The platform’s data and identity products allow businesses to access customer transaction histories and balance data, verify account information, and perform fraud checks. The payments product enables bank-to-bank transfers for one-click pay-ins and payouts.

Expanding its reach outside South Africa and Nigeria, Stitch sets to step foot into Kenya, Ghana and Egypt soon.