Mustapha Taofeek said he stopped using PoS – points of sale vendors that have significantly changed how Nigerians conduct daily financial transactions – two years ago.
In August 2020, a week after making cash withdrawal from a vendor, Mr Taofeek said he received a N10,000 debit notification he never authorised. While trying to confirm details of the transfer, he received another notification on his phone, then another, and some more. His bank reported total debit of N486,000 that day.
“I was confused and suddenly began sweating,” said Mr Taofeek, an Abuja-based sales representative. He managed to transfer his balance – mostly sales proceeds belonging to the baby care company he works with – to another account before blocking his ATM card.
His bank, Guarantee Trust Bank, said the card details had been stolen and used for online purchases and there was nothing it could do, Mr Taofeek said. The bank did not respond to PREMIUM TIMES inquiries. A spokesperson did not keep a promise to discuss the case.
Mr Taofeek said he completed repaying the money to his company in April 2022. “I was always teary whenever I received my monthly salary during this period, because I was paying a debt I never used for something in my life,” he said.
Nigeria has made efforts in the last decade to increase the number of citizens who have access to financial services, counting on expanded financial inclusion as a tool for creating wealth and tackling widespread poverty. The Central Bank of Nigeria, which coordinates the effort, aimed to see adult Nigerians with access to financial services rise from 21.6 per cent to 70 per cent by 2020.
Banks turned to agency banking, which predominantly uses PoS, to bring the unbanked and underbanked into the pool. While Nigeria missed 2020 target, the number of adults using financial service agents increased from about 4 million in 2018 to 26 million using agents in 2020, according to EfInA, a development-focused organisation that promotes financial inclusion in the country.
The rise in agency banking in the country has enabled easier and quicker payment services to millions of customers, including in rural communities. But it has also set up a challenge: customers say fraudsters have taken advantage of widespread use of their bank details to steal from them.
Ben Olakunle said he had a similar experience with Mr Taofeek and he lost almost a million naira.
“Just using a POS dealership point. My ATM information was extracted and used to order products. Indicated below are the details of the transaction. Please, Nigerians, help me raise your voices for KONGAPAY to declare the recipient of this purchased item,” Mr Olakunle narrated on Twitter in April.
Funmike Afolabomi, who commented under Mr Olakunle’s tweet said, “Happened to me before but it was used to order on wish .com. I sent (wish) an email explaining how the transaction was fraudulent. Mine was with First Bank; they couldn’t help me.”
“The bank’s customer care insisted that the transaction was initiated by me…,” she added.
Points of Sale terminals were introduced in the country in 2012 to promote the CBN’s cashless policy. Its popularity rose after the 2020 COVID-19 lockdowns that stopped people from going to the banks.
With PoS machines, customers are able to withdraw money, make transfers and make deposits without visiting their banks. The number of POS terminals in Nigeria grew from 150,000 in 2017 to 543,000 in April 2021, according to Statista.
Reports of fraudulent activities have made some wonder how customers’ details are obtained for theft. A financial analyst and banker, Olumide Balogun, said he did not believe PoS machines were used to extract customers’ card details after transactions.
“I am not sure it is possible and I don’t think it happens because the designs and configuration of the digital PoS machines and ATM cards changes configuration after every usage such that it is difficult for onlookers nearby to master the entering of pins by customers,” he said.
Confidence Richard, a POS agent who operates at Abak market of Akwa Ibom State, also said it was unlikely customers’ data were extracted.
“The POS machine I am using cannot download a customer’s card details. It will only show the last digits of the card after the transaction, but it’s not possible to download everything on the customer’s card,” Mr Richard said.
Abdulrahman Muslim, an operator at New Benin market in Edo State, said he had heard of how a PoS operator colluded with another person to take photos of customers’ card details.
Mr Muslim said a common problem operators face is that when a transaction is declined and the customer is debited nonetheless, a problem called dispense error, most customers find it difficult to believe it is a network issue. They would suspect fraud.
But an assistant branch manager who did not want his name in print because he was not authorised to speak on the issue, said data can be downloaded from customers’ ATM cards if a chip is planted in the machine to read and copy card information.
He advised customers not to expose information such as Card Verification Value(CVV), Permanent Account Number(PAN) and expiration date of their debit card to POS operators.
