The Central Bank of Nigeria, in collaboration with the Nigerian Electronic Fraud Forum (NeFF), is partnering with the Association of Mobile Money and Banking Agents of Nigeria (AMMBAN) to introduce a new feature on Point of Sale (PoS) terminals. This feature is designed to detect and flag fraudulent transactions at agents’ locations. It will achieve this by requesting specific Know Your Customer (KYC) details before processing certain transactions.
Fasasi Sarafadeen Atanda, the President of AMMBAN, mentioned that the initiative is at an advanced stage, with the technological aspects nearing completion. The Nigerian Interbank Settlement System is actively contributing to driving this initiative, emphasizing the collaborative effort involving various stakeholders to enhance security and combat fraudulent activities in electronic transactions.
The collaboration effort involving the Central Bank of Nigeria, the Association of Mobile Money and Banking Agents of Nigeria (AMMBAN), and the Nigerian Electronic Fraud Forum (NeFF) is also driven by the Nigerian Electronic Fraud Forum. Lilian Phido, the head of Corporate Communications at the Nigerian Interbank Settlement System (NIBSS), emphasized the importance of constant innovation within the industry. This necessity led to the establishment of the Nigerian Electronic Fraud Forum as a dedicated body that includes all key players and stakeholders. The forum works proactively in collaboration to ensure the integrity of payment systems across the nation. The collective efforts of these entities underscore the commitment to enhancing security measures and combating fraud in the electronic payment ecosystem.
The new feature designed to flag fraudulent transactions on Point of Sale (PoS) terminals will be prominently displayed at agent locations across Nigeria. Following a recent meeting with the Nigerian Interbank Settlement System (NIBSS), the Association of Mobile Money and Banking Agents of Nigeria (AMMBAN) aims to launch this feature by the first quarter of 2024.
To facilitate easy tracking of fraudsters at agent locations, a coalition of security agencies, including the Nigerian police and the Department of State Services (DSS), is being formed. AMMBAN and NIBSS are also active participants in this coalition. As part of their efforts, the coalition intends to mandate a common identification system for the over 1.7 million banking agents listed on the AMMBAN database. This collaborative approach aims to strengthen security measures and streamline identification processes within the mobile money and banking agent ecosystem.
Discussions are underway regarding the potential training and certification of agents, but opinions on this strategy vary among stakeholders. Some argue that the primary vulnerability is not at the agent location but rather the fact that some accounts and wallets lack ties to real identities. Femi Omegbenigun, CEO of 3Line Card, a Nigerian payments company, highlights the issue of accounts with underlying Know Your Customer (KYC) issues, which can lead to agents unknowingly disbursing funds from fraudulent transactions.
Omegbenigun emphasizes that the challenge lies in accounts not being properly tied to real identities, making it difficult for agents to discern the legitimacy of transactions. He notes that while whistleblowing channels exist, agents have not consistently utilized them. Instances have occurred where agents flagged suspicious transactions to banks, but the financial institutions failed to take appropriate action. This underscores the complexities and challenges involved in addressing fraud within the payment ecosystem and the need for comprehensive solutions that tackle underlying issues such as KYC deficiencies.
The challenges persist when issues are reported to security agents, as they have been known to request money before taking action. This discourages individual agents from pursuing such cases, as it may result in wasting resources without effective resolution, as highlighted by Atanda.
Meanwhile, as they await the implementation of the new feature on PoS terminals, agents have taken steps to address the issue. Atanda notes that agents have begun implementing the Bank Verification Number (BVN) and National Identification Number (NIN) policy of the Central Bank of Nigeria (CBN). Under this policy, new customers are required to provide either a BVN, NIN, or both when opening an account. This move aims to enhance the identification process and mitigate the risks associated with fraudulent transactions in the payment ecosystem.