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CBN Moves to eradicate E-Payment Fraud

By on September 28, 2012

The Central Bank of Nigeria (CBN) has issued out a communiqué to banks as well as other financial institutions to put all hands on deck to combat cybercrimes as well as electronic payment fraud, to sanitize the financial system.

CBN, made this call through Director, Financial Policy and Regulation Department, Mr. Chris Chukwu, at the September version of the Nigeria Electronic Fraud Forum (NEFF) in Lagos.

Represented by Mr. Sebastine Barde, Chukwu said, “A common problem associated with e-payments platforms is their use by cyber criminals who take advantage of inadequate controls in the payment platforms.”

“We noted that Automated Teller Machines were introduced in 1993 without adequate guidelines and embedded security controls. The machines were using magnetic strife cards, which were susceptible to cloning hence the myriad complaints of illegal withdrawals from customers’ accounts by cyber criminals.”

He stated that before 2011 complaints were very alarming but following the migration of Euro Master Visa card last year, even though complaints have reduced now considerably; “we intend to leave no stones unturned.”

However, with the migration of in February 2011, such complaints have dropped substantially in 2012.”

“E-payments are consequently globally favoured and rapidly pursued by nations because they are efficient, convenient, cost effective, transparent, secured, fast, and accurate, reduce corruption by minimizing interaction of government’s officials with contractors and leaving trails, provide better visibility into an entity’s spending, afford ability to leverage financial incentives on transactions, as well as advanced fraud protection.” He said.

“It is therefore no exaggeration to say that e-transactions have comparative advantages over cash-based transactions. The cost of currency management is usually a high figure in the accounts of any central bank of a cash-based economy.”

According to Chukwu, e-payments were designed to automate, integrate, and simplify the payment process.