Cash-less policy: CBN sets up fraud prevention committee
Category: CASHLESS NIGERIA
February 13, 2012
The Central Bank of Nigeria has established an Automated Teller Machine Fraud Prevention Committee to address risks associated with the use of alternative e-payment channels.
The members of the committee, which include banks, the Economic and Financial Crimes Commission, National Identity Management Commission, Interswitch and ValuCard, will meet monthly to make e-payment more secure for bank customers.
A statement from the Bankers’ Committee said setting up the committee had become imperative to address card frauds, especially the ones associated with the use of ATMs and Point of Sale terminals.
It noted that ATM fraud was prevalent when magnetic strip cards were in use.
“All Nigerian banks have migrated their cards to chip and PIN technology, which is more secured and has drastically reduced the fraud level in the industry. “In terms of security of platforms, it said that ATM fraud was prevalent when Nigeria was using magnetic stripe cards. But last year, Nigeria migrated, all their cards to chip and PIN, which is more secured, and drastically reduced the fraud level. With chip and PIN, the chances of fraud are reduced provided a customer keeps his PIN secret,” the Committee said.
In terms of infrastructure, the committee said that the apex bank was working with the Nigeria Communication Commission and telecommunications operators to ensure there were dedicated communication links for the PoS system in the country, adding that if the PoS or mobile phone was stolen, the money for the user would remain safe.
The committee disclosed that the literacy required to operate the PoS was minimal as many Nigerians could use a mobile phone needed to make mobile payments. It advised merchants to recognise that there were other ways in which the PoS terminal could benefit them, such as selling other services and earning commissions.
For instance, mobile credit can be sold through the terminals, or it can used to collect bill payment for firms such as the Power Holding Company of Nigeria. It noted that training would be provided by the acquirer’s payment terminal service provider, saying that part of the deployment process was to ensure a practical training of how to use the PoS for the merchant and their workers.
The committee said the apex bank had mandated banks or independent organisations that deploy ATM for use by the public to address technical faults within 72 hours. The committee said the apex bank had equally set a standard for operators in the electronic banking system to ensure seamless operations.
“The guideline, which focuses on technology and specification, deployment, operations, security, maintenance dispute resolutions, liability shift, regulatory monitoring and penalties for defaulters, were addressed to banks, non-banks or acquirers,” it added.