PoS Fraud: Vendors, Customers Raise Alarm over Rippling Shortcomings
- Experts say the incessant rate of fraud in the Point of Sale (PoS) machine service is becoming worrisome
- Though lucrative and productive, quite a number of bad eggs have begun to tarnish the good works of a fine, veritable tech-solution gadget like the PoS machine
- Meanwhile, victims of PoS fraud have called on the Central Bank of Nigeria in conjunction with the federal government to combat PoS fraud
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The emergence of digital and mobile banking in Nigeria is by far one of the greatest milestones in the banking sector.
Going by its pace in rejuvenation and being at par with other western nations of the world, It is safe to say banking has been made easy over the years.
It is so easy that one can bank effortlessly in the comfort of their closet, offices, or any given place via a veritable mobile device.
In Nigeria for instance, the advent of Point of Sale (PoS) machines has been a veritable tool for business owners both at the small and large scale levels.
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You can find the PoS machines at the mall, restaurants, hotels, electronic shops and a host of other business centres.
However, quite a lot of industrious Nigerians have turned the PoS machine into something I like to call a "mini ATM machine" or a "mobile ATM machine".
Nationwide, at every corner store, somewhere in your street, at the market, at the salon, or on campuses, you will find at least one PoS vendor in his/her small tent going about their businesses.
These PoS agents or vendors as I like to call them will give you cash in exchange for debit on your ATM card for the same amount given to you and in turn, they charge you an extra token as their own profit.
Down in the north-central part of Nigeria, most especially Abuja and Niger state, PoS vendors are predominantly in operation, especially in suburban areas with limited access to a banking hall or ATM machines.
In a recent report by PRNigeria, a PoS operator in Kwamba, Niger state disclosed how the business has been profitable to him over the years but not without challenges.
Abdulrazaq Siraja who runs a PoS outlet through a third party (Chika Nwendi) said he has been hit by tragedy while running the business.
He narrated how Nwendi whom he employed to manage the business was scammed by a customer who came to deposit cash.
Siraja stated that on the faithful day of the unfortunate incident, his shop attendant (Chika) attended to the fraudsters.
He said they approached Chika to deposit the sum of N100, 000 which had been smartly mixed with N1000 notes and N100 notes.
Chika who naively counted the money and issued the transaction discovered the scam when she wanted to audit after the close of work.
“They put N1,000 notes at the top and bottom of the bundle of N100,000 they gave my PoS agent. Then, in the middle of the bundle were just N100 notes”.
Meanwhile, the incident was quickly reported to the bank which they use for the PoS operation. While the bank did their findings, It was gathered that the account to which Siraja had transferred the N100,000 (for the fraudsters) belonged to another PoS operator in Kano.
Similarly, customers and not just vendors have also had a test of the disadvantage of PoS usage.
In the same report by PRNigeria, Mr Mathew Okeke revealed how he once had a terrible experience using a PoS machine for banking.
Okeke disclosed that details of his debit card were extracted and used to credit a betting account.
“I was confused and suddenly began sweating, after I woke up the next day to see several debit alerts on my phone.”
How to tackle POS scam
Having in mind that there is a growing thread of PoS transactions across the federation, it will be alarming if solutions are not preferred to tackle PoS fraud.
Statistics from the Nigeria Interbank Settlement System (NIBBS) reveal that the value of transactions through PoS terminals across the country in the first months of 2021 stood at a staggering N3.01trillion which by now would have boomed into an unbelievable amount.
IT expert, Ali Isa Musa, harped on the need for PoS operators/users to upgrade their PoS machines with software at intervals.
Similarly, a PoS vendor in Kubwa (Abuja) decried the incessant rate of PoS fraud.
The 31-year-old however urged the CBN to come up with a tech device that can track these perpetrators.
‘We want CBN to deploy sophisticated technological devices to track these wicked people.
“Also, the government should subsidize for us, smaller CCTV cameras, that we can mount at the front of our business kiosks, to capture criminals, that will visit PoS vendors, with the intention to defraud them."
Meanwhile, despite the seamlessness and huge success recorded by the use of PoS, experts have exhibited growing concerns about the rising increase of PoS terminals and the perpetrated fraudulent activities within some terminals.
The Central Bank of Nigeria (CBN) and other regulatory body are also yet to proffer a lasting solution to these menace.