Cashless society is a system in which all purchases of goods and services are made by credit card or e-payments system. It is a policy that reduces the amount of physical cash that people carry around. Therefore, the system heavily rely on the alternative banking channels (contactless payments terminals) to achieve it purpose. The Central Bank of Nigeria announced its intention to transform Nigerian economy into cashless one in 2011. We argue that it is difficult, if not impossible for a cashless financial system to work under the present state of the Nigerian financial system. This cannot be overemphasized because forging growth in alternative payment system requires inclusivity, proper infrastructure and security of funds and information. The main objective of this study is to make a case for multifactor biometric authentication system in the Nigerian financial service industry. The study also highlight the level of financial inclusion as well as the security vulnerability of the existing system in Nigeria. Descriptive statistical technique of data analysis is employed for the secondary data from 2013-2018. The study concludes that electronic payments fraud has been on increase because of a weak security framework in the existing payment system in Nigeria. This is as the result of cashless policy needs for the inclusion of adults’ population into the formal financial system to achieve an effective cashless economic society. The study is also of the opinion that the increase in the volume of fraud in the payment system and the losses of funds is related to the recent increase in the number of adults in the formal financial system in Nigeria. The study therefore recommends that policymakers (CBN) should embark on the search for the solution to the problem of information security in the Nigerian financial system. The study is recommending the multifactor biometric authentication for users as a remedy to the increased electronic payment system fraud in Nigeria.

Keywords : Banks, Biometric Technology, Financial Security, Informal Sector.