Some banks are still issuing magnetic stripe cards to customers in apparent disregard of the Central Bank of Nigeria (CBN)’s directive to all commercial banks to stop issuing the old Automated Teller Machine (ATM) cards, Nigeria CommunicationsWeek can reveal.
CBN directed all banks to upgrade their e-payment channel to Europe MasterCard and Visa (EMV) standard by issuing chip and pin based cards beginning from April 1 this year.
Nigeria CommunicationsWeek however gathered that four banks are still issuing the magnetic stripe cards two months after the deadline.
Most of the cards issued by these banks were produced in March this year and will expire in March 2011, against the 2010 date announced by the switching company, Interswitch, when it said that magnetic stripe cards will no longer be used on its platform.
Nigeria CommunicationsWeek also gathered that in spite of the technological upgrade of debit cards to EMV standard chip and pin cards by Interswitch, most banks are still reluctant to issue them.
Further investigations revealed that the banks have not actually upgraded their e-payment channels to accept chip and pin based cards, a clear violation of the regulator’s directives.
Meanwhile, ATM transactions have continued to rise in the country accounting for 91 percent of all electronic transactions.
Nigeria CommunicationsWeek gathered that the dominance of ATM in electronic transactions may have informed the current efforts by CBN to ensure that the system is strictly guarded against fraudsters.
CBN estimates that there are approximately 8,138 ATMs in the country, representing a penetration rate of one ATM per 18,000 individuals.
The point of sales (PoS) penetration rate represents a ratio of less than 90 PoS terminals per one million inhabitants, which is however a low penetration rate compared to other countries in Africa.
Effective branchless banking requires the co-operation of parties outside the control of the CBN, such as telecommunications service providers and consumer protection agencies, as the CBN is in the process of drafting mobile payment guidelines to promote branchless banking.