The Central Bank of Nigeria (CBN), in a bid to curb fraudulent activities on PoS terminals across Nigeria, has announced the plan to roll out a fraud-flagging feature by the end of the first quarter (Q1) of 2024.
The Apex bank through the Nigerian Electronic Fraud Forum (NEFF), has collaborated with the Association of Mobile Money and Banking Agents of Nigeria (AMMBAN) to create this feature that will help detect fraudulent transactions at agents’ locations, by requesting specific KYC details before processing some transactions.
Also, the initiative will seek to eliminate the unauthorized utilization of mobile money wallets, bank accounts, or credit cards and re-establish Nigeria’s reputation as a secure business destination.
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The initiative which is nearing completion, is driven by the NeFF and the Nigerian Interbank Settlement System, according to AMMBAN President Fasasi Sarafadeen Atanda. The feature will be noticeable on Po terminals used by agents throughout the country, and its launch is expected in the first quarter of 2024.
Furthermore, a coalition involving security agencies such as the Nigerian Police and the Department of State Services, along with AMMBAN and NIBS, aims to foster easy tracking of fraudsters at agent locations. The coalition proposes a common identification system for the over 1.7 million banking agents on AMMBAN’s database.
The CBN’s move to launch a fraud-flagging feature on PoS terminals across Nigeria, by the end of the first quarter (Q1) of 2024, is a laudable initiative that is crucial, given the alarming rate of fraudulent transactions that occur on PoS terminals.
Regarded as one of the positive innovative interventions in the financial sector, the Point of Sales (PoS) system has undoubtedly made banking easy and promoted financial inclusion, especially in rural areas. However, on the flip side, it has been infiltrated by fraudsters who swindle unsuspecting Nigerians of their hard-earned money.
The Points of Sale terminals were introduced in the country in 2012 to promote the CBN’s cashless policy, which gave rise to agency banking in the country, but has also set up a challenge for customers as fraudsters have taken advantage of widespread use of their bank details to steal from them.
Statistics from the Nigeria Interbank Settlement System (NIBBS) revealed that the value of transactions through PoS terminals across the country in the first months of 2021 stood at a staggering N3.01 trillion. In the first quarter of 2023, Nigerian banks reportedly lost N472 million for PoS and mobile fraud, according to data from the Nigeria Deposit Insurance Corporation (NDIC).
The CBN’s soon-to-be-launched fraud-flagging feature is poised to curb the surging fraud on PoS terminals across Nigeria. Also, it is important that regulators and financial institutions stay ahead of the curve in combating fraud.
The rapid evolution of technology necessitates constant vigilance and adaptation, which involves introducing stringent security protocols, educating consumers, and enhancing regulatory oversight to curb fraud.