Account security and convenience are tipped as the biggest attraction to e-payment. Many cardholders insist that rising cases of e-frauds and loss of funds by customers are biggest impediment to cashless banking initiatives. Assistant Business Editor COLLINS NWEZE writes that regulators, operators and non-bank institutions need to collaborate to give the e-payment customers the security that will boost confidence in the industry.
Lagos-based entrepreneur, Michael Okafor, was one of the first adopters of e-payment. For him, cash has little or no place in today’s world given the rising benefits of digital payment in the economy.
He said once a transaction is secured, and it is seamless, then such payment platform will gain the attention of more users.
“People believe in convenience and security of their transactions. Once a bank or other e-payment facilitators miss the two services, then, the acceptance of whatever service they provide will decline,” he said.
Okafor held that view until he lost N1 million to e-fraudsters, who cloned his Automated Teller Machine (ATM) card and made away with his money.
He is one of the cardholders that, according to Nigeria Electronic Fraud Forum (NeFF), lost over N12.8 billion yearly to e-fraudsters.
Today, he calls for caution on the part of the customer and banks. He said customers should protect their data from third parties, while banks guard against insider abuses.
“I think the banks and customers have roles to play. Customers should protect their personal data while bank should fortify their systems and guard against insider abuses,” he said.
Internet banking, mobile banking, Point of Sale (PoS), Automated Teller Machines (ATMs), Unstructured Supplementary Service Data (USSD), web payment, Nigeria Quick Response (NQR) code, among other e-payment channels, are dominant modes of payment by a large part of the population.
These channels have equally exposed the banking system to enormous risks from e-fraudsters.
For instance, nothing forewarned Michael Abiodun, a Mushin, Lagos tyre merchant of the problem he would soon face.
That Saturday, a customer bought goods worth N120,000 from him. The customer said he had no cash and requested Abiodun’s account details to transfer the money.
He said: “He typed the number on his phone and within few minutes, I got transaction alert from my bank. The fake alert showed that N100, 000 had been credited to my account. So, the fraudulent customer took the goods and went away.
“The next working day, which was Monday, I went to my bank to withdraw the money, but it was not there. My account officer showed me my last transaction detail, and informed me that the alert on my phone was not from the bank and that it was a fraud. That was how I lost the money and efforts to trace the fraudster failed.”
Abiodun released the goods because the fake alert showed his previous account balance and the new deposit by the customer. That, he said, was an indication that the fraudster was collaborating with an insider at the bank.
“Up till today, I have not recovered that money,” he said.
That horrible experience, Abiodun noted, has made him to always check his account balance with mobile apps or through internet banking channels before releasing his goods, instead of relying solely on bank alerts.
With over 89 per cent of financial services fraud happening through electronic channels and only 11 per cent was non-electronic, the Central Bank of Nigeria (CBN) had to spell out new rules on data protection for banks.
It directed banks to secure customers explicit consent for the use of their data. Banks are also instituting multiple layers of security to secure their customers’ transactions from unathorised parties.
They are also carrying out campaigns to educate customers on data protection rules and need not to disclose their password to third parties.
The CBN open banking rules require customers to approve requests from banks to share their customers’ data with other competing financial institutions for the purpose of marketing of deployment of digital banking products and services.
Banks have reacted to the rising cases of e-fraud. Access Bank Plc, Union Bank Plc, Zenith Bank Plc, among others, launched dedicated campaigns for customers on measures they can take to protect themselves.
The lenders said they have prioritised bank account protection by providing right information to customers for the safety of their transactions.
For instance, the lenders have intensified efforts at educating their customers to become more protective of their bank accounts.
Deputy Managing Director, Retail North, Access Bank, Victor Etuokwu, said there has been a significant increase in the rate of internet-based and technology-perpetrated fraud in recent years.
“We want to ensure that our customers are not only protected but are also aware of the tactics employed by fraudsters. Access Bank will never request for personal banking information such as your 16-digit card number, password, personal identification number, bank verification number, One-Time Password (OTP). So, customers are also advised to never share this information with anyone even if they claim to be from the bank,” he said.
Etuokwu advised law enforcement agencies to also develop increased expertise in dealing with cybercrime, including operations across national borders.
Managing Director, Systemspecs Technology Services Limited, Demola Igbalajobi said banks, telcos and switches have roles to play in achieving a seamless and secured payment system for customers.
He said all stakeholders in the payment space should adopt process and make investments that protect customers’ accounts from e-fraudsters and engender confidence in the payment system.
The NeFF on its part, said the introduction of chip-and-pin payment cards have led to drastic drop in ATM card fraud.
