New Fraud Alert Feature Coming to Nigerian PoS Terminals by the End of March 2024

In Nigeria, there’s some exciting news in the payment systems, particularly regarding Point of Sale (PoS) terminals. The Central Bank of Nigeria, working alongside the Nigerian Electronic Fraud Forum (NeFF) and the Association of Mobile Money and Banking Agents of Nigeria (AMMBAN), is set to introduce a new feature on PoS terminals to flag fraudulent transactions.

The idea is pretty straightforward: when someone tries to make a transaction that seems suspicious, the PoS terminal will prompt the agent to ask for specific identification details before processing the transaction. This extra layer of security aims to reduce fraud and protect both customers and agents.

Fasasi Sarafadeen Atanda, the President of AMMBAN, expressed optimism about the progress of this initiative, noting that the technology side of things is almost complete. The Nigerian Interbank Settlement System (NIBSS) is playing a significant role in driving this effort forward.

Lilian Phido, head of Corporate Communications at NIBSS, highlighted the importance of collaboration in tackling electronic fraud. The Nigerian Electronic Fraud Forum was established to bring together key players and stakeholders to work proactively on safeguarding payment systems in the country.

The new fraud-flagging feature will be prominently displayed on PoS terminals nationwide. AMMBAN is aiming to launch it by the first quarter of 2024, following discussions and meetings with NIBSS.

But that’s not all. There’s also a coalition of security agencies involved, including the Nigerian police, Department of State Services (DSS), AMMBAN, and NIBSS. Their goal is to make it easier to track down fraudsters operating at agent locations. One of their strategies is to establish a common identification system for the over 1.7 million banking agents in the AMMBAN database.

However, there are some challenges to overcome. Femi Omegbenigun, CEO of 3Line Card, a Nigerian payments company, pointed out that some accounts and wallets aren’t tied to real identities, making it difficult for agents to detect fraudulent transactions. Even when agents report suspicious activities, financial institutions or security agencies don’t always take action promptly.

Atanda also mentioned the reluctance of agents to report fraud due to fear of wasting resources or encountering corruption. This highlights the need for effective whistleblowing channels and stronger support from financial institutions and security agencies.

In the meantime, while waiting for the new fraud-flagging feature on PoS terminals, agents have started implementing the Bank Verification Number-National Identification Number (BVN-NIN) policy of the CBN. This policy requires new customers to provide either a BVN or NIN, or both, to open an account, adding another layer of security to the process.

Overall, these efforts represent a significant step forward in enhancing the security of electronic payment systems in Nigeria. By leveraging technology, collaboration, and proactive measures, stakeholders are working together to combat fraud and protect consumers in an increasingly digital world.