CBN orders banks to pay for fraud on mobile money transactions

Customers who lose money to fraudsters through the mobile money-driven Unstructured Supplementary Service Data (USSD) banking will be reimbursed by their banks, the Central Bank of Nigeria (CBN) has said.  

The USSD Banking platform allows customers to transfer money to third party, buy airtime, open accounts, pay bills and book travels, among other services, using their mobile phones, but the level of customer protection is still below regulatory threshold.

 CBN Director, Banking and Payments Department, ‘Dipo Fatokun, said the apex bank reviewed the process of USSD deals and directed banks to allow their customers transacting through the platform to use a Personal Identification Number (PIN) instead of the last four digits on their Automated Teller Machine (ATM) cards. 

Banks are yet to perfect the security around the USSD transaction plan. They are not providing additional security, such as allowing PIN into the transaction process as against the current practice whereby customers rely on the last four digits of their ATM cards for transactions. 

This has resulted in many customers losing their money to fraudsters or people who have access to their ATM cards. 

Fatokun said until the banks are able to provide OTP or token to customers transacting through the USSD platform, they will bear the cost of any loss of funds through the process. 

CBN data showed that about N40billion transactions pass through the mobile money network monthly. 

Source - TheNation