While making efforts tocombat an emerging type of electronic payment (e-payment) fraud, the Central Bank of Nigeria (CBN) and the Nigerian Communications Commission (NCC) would soon come up with regulations to tighten the process of Subscriber Identification Module (SIM) card swap for telecom subscribers.
The Director, Banking and Payments System Department, CBN, Mr. ’Dipo Fatokun, disclosed this at the weekend, when he delivered a presentation entitled: “Electronic Payments Industry’s Performance and Regulatory Issues,” at a bi-monthly forum organised by the Finance Correspondents Association of Nigeria (FICAN) in Lagos.
Fatokun said some of the fraud we are still battling is the issue of SIM swap. We have heard of instances where people would say, ‘for three days, my phone did not work.’ And because many of us have more than one phone, if one is not working, at least one will work. “So, what they do is that they swap your phone.
That is, they just walk up to a service provider and claim to be the owner of the line. Most often, they have studied that number and they have collaborators, probably in the bank.
And because the process for doing a change of SIM card is so loose, the telecom company would change the SIM card for the person and so he assumes the phone number.
What does he do? He puts the SIM card in another phone and start using the USSD to make transfers out of the account into another account. So, we are working with NCC to tighten the process of SIM card swap. It may include biometrics and a unique number may be required.”Speaking further, Fatokun said in Nigeria, we have consistently over the last three years reduced the value of electronic fraud. The game changer is the Bank Verification Number (BVN).
It is not only helping us to identify who owns what, but going forward, just as it was announced by the Bankers’ Committee at the last meeting, the BVN would be used as an instrument to track fraudsters in the system.” Fatokun explained that “when electronic fraud happens, money is moved from one account to another.
That other account that money is moved to, the owner can be identified. And when such owners can be identified, they can be blacklisted or watch listed.
It means that fraudsters can be identified and, if possible, taken out of the system. So, the BVN is going to be a game changer in that respect, we are working on the final framework and when it is concluded, it would be issued to the industry.”
The CBN director, who described e-fraud as the biggest challenge facing the electronic payment sector, stressed that the issue needs to be collectively tackled by customers, banks and financial sector regulators. According to him, “electronics payment is any form of payment where an electronic system is used to initiate, authorise and confirm the transfer of money between two parties.
This could be for various reasons, such as payment for goods and services, settlement of obligations and gifts, among others.
He advised banks and other e-payments service providers to develop a holistic vision and programmes for compliance with regulations.
Operators should inculcate a proactive and collaborative compliance mind-set in their people and processes, to achieve efficient adoption of regulatory practices requirements into day-to-day operations.
Collaboration between regulators and operators is a key strategy to achieving an effective policy formulation and regulation. Holistic approach, anticipation of regulatory actions, industry collaboration and dialogue are the best ways for the industry stakeholders to maximise return on investment in compliance efforts,” he said.
