Automated Teller Machine (ATM) fraud which has created fear in use of e-payments products has recorded a significant 98.5 per cent reduction, thanks to chip and pin technology, Nigeria CommunicationsWeek can report.
Before now, the magnetic stripe card in operation was fraught by a lapse that makes it susceptible to compromise by fraudsters.
As part of measures to manage fraud on the e-payment landscape, the Central Bank of Nigeria (CBN) had in 2010 effected migration from the magnetic stripe-based payment tokens, to the Chip and Personal Identity Number (PIN)-compliant channels and tokens.
The CBN also instituted an industry ATM Anti-fraud Committee which was adjusted to become the e-Payment Fraud Forum, a group that ensures that anti-fraud mechanisms are kept abreast of new challenges for proactive responses.
The chip and pin card advantage gives users the rest of mind and confidence that their accounts cannot be wiped clean over night by fraudsters.
The CBN is also set to acquire a new fraud prevention system to boost the cashless policy initiative.
Chidi Umeano, head, Shared Services at the CBN said the cash-less project is on course and the initial challenges are being overcome.
He said the goal of the fraud prevention system is to provide the facility to distinguish fraudulent and legitimate transactions based on redefined checks in online payments. This will allow only legitimate transactions to be processed.
The CBN, he said believes the adoption of the system will boost the cash-less initiative by strengthening the protection against fraudulent payment activities.
Increasing fraud rates around the world has dampened the growth of electronic payment by exposing merchants to substantial losses and unnerving security-conscious customers.