An aboki is a person with a phone, a stack of naira, and a network of counterparties. He is not a folk figure and he is not a scammer by definition; he is a person doing a job the formal banks either overprice or refuse.
The word is Hausa for friend, used across Nigeria for the person who runs the street currency exchange. The same shape runs in Kenya, and in Latin America as cambio. What follows describes the Nigerian version, but the mechanics travel.
What an aboki actually does
An aboki is a working relationship, not a physical spot. On any given day the man you deal with in Lagos or Abuja has a phone, some cash, and standing arrangements with two or three other changers, a small importer paying for goods in dollars, sometimes a bank employee, sometimes a stallholder who takes dollars in exchange for stock. If he has a stall or a booth, that is where the trade happens. If he does not, it happens on a bench, in a car, or over a call. The trade is the network, not the address.
Someone needs naira. Someone else has naira. He knows both, takes a small cut for the introduction and standing behind the settlement, and moves the money the same day.
How the rate is set
There are two rates for the naira. The one the Central Bank of Nigeria publishes (the CBN window) and the one that clears when people trade with each other on the street (the parallel market, sometimes called the black market). These have not been the same number in years and are sometimes very different. The gap moves with oil prices, with sanctions, with any weekend of political news.
The aboki sits on top of the parallel-market rate. He buys naira from a counterpart slightly under the going rate and sells to the customer slightly over it. That small gap is his margin. Larger trades usually see a tighter margin; a small trade sees a wider one.
For a UK-side sender, the sterling side is often more expensive than a bank or a formal app would charge, because the aboki chain has to move cash between two people who need to meet. The naira side is usually better, sometimes much better, because the parallel-market rate typically beats the CBN window. You are paying more in sterling to receive more in naira, faster, with less paperwork, and no formal recourse if the chain breaks.
What UK law says
An operator moving money between a UK sender and a Nigerian receiver as a business is a money service business. Two things have to be true for him to operate legally here.
He has to be registered with HMRC for anti-money-laundering supervision. HMRC guidance is explicit that informal money transmission counts under the rules, and that a business cannot offer these services before HMRC confirms the registration.
And because taking money from a customer to pay a beneficiary is a payment service, he also has to be either registered or authorised by the Financial Conduct Authority under the Payment Services Regulations 2017. The FCA route sits alongside HMRC, not instead of it.
You can check both. HMRC publishes the 
Anti-Money-Laundering supervised businesses register. The FCA publishes its 
Financial Services Register. Most aboki operators sit outside both. Ask under what business name the person you are dealing with trades, and look them up. Someone who cannot answer, or is not on either register, is trading illegally in the UK.
When the chain breaks
The aboki disappears mid-transfer. His phone goes dark, the counterpart in Lagos never gets the call, and the naira does not arrive. A rate quoted at agreement collapses between agreement and pay-out and the operator quietly hands over less than promised. A WhatsApp voice-note, a scribbled phone number, a slip of paper: none of it survives a UK court. The 
Financial Ombudsman Service does not cover disputes with an unregistered operator, and the FCA compensation scheme does not stand behind money handed to someone off the register.
These are the ordinary failure modes of a system that runs on trust and cash rather than on a contract you can put in front of a judge.
When the aboki is the right tool
The aboki is a sensible choice when the receiver has no formal account to route money into, when the parallel-market gap is wide enough that even after his cut the family is meaningfully ahead, or when the transfer is urgent and a bank freeze would cost more than the whole margin.
He is not the right tool where the sender needs a written record: a tuition payment, a business invoice, a rent deposit. Not where the receiver has a working Nigerian bank account and a licensed transfer app quotes a rate within a small percentage of the parallel market this week. And not where the amount is large enough that loss of recourse would hurt.
The aboki is a working piece of financial infrastructure with named failure modes and no ombudsman standing behind him. Use him when the trade makes sense and you can bear the loss if it breaks; use the app when it does not. The other pieces on what happens to money once it lands on the other side sit under arrival.