× Digital News Videos Health & Science Opinion Education Columnists Cartoons Lifestyle Moi Cabinets Arts & Culture Ramadhan Special Podcasts E-Paper Lifestyle & Entertainment Nairobian Entertainment Eve Woman Travelog TV Stations KTN Home KTN News BTV KTN Farmers TV Radio Stations Radio Maisha Spice FM Vybez Radio Enterprise VAS E-Learning Digger Classified Jobs Games Crosswords Sudoku The Standard Group Corporate Contact Us Rate Card Vacancies DCX O.M Portal Corporate Email RMS

Central Bank to issue guidelines on cashless transactions

By By FREDRICK OBURA | January 19th 2013

By Fredrick Obura

Central Bank of Kenya (CBK) will next week release guidelines for cashless transaction to secure the system from fraudsters and lower down the cost to consumers.

The new guidelines to enhance outreach, safety and efficiency of the payment system infrastructure is informed by growing use of plastic and mobile money.

 “Following completion of the study and in view of its importance in informing National Payment System Policy, CBK would like to share the findings and recommendations with key stakeholders in the payments industry,” indicated a statement released by the bank.

CBK says it will be holding a workshop on Tuesday next week to bring together participants from commercial banks, mobile financial services providers, Communication Commission of Kenya, and other stakeholders where the study of the new guidelines would be unveiled.

According to CBK data, the number of debit cards issued had grown nearly 15 per cent to 8.1 million cards. Card payments value have also rose by a significant 83 per cent to Sh386 .6 billion, up from Sh211.2 billion during the first-half of last year.

Audit firm, Deloitte, estimated the losses incurred by the various East African banks stood at over Sh4 billion since 2011 to the first quarter of last year. Stakeholders, however, have expressed fear that the amount lost by banks to card skimmers in the region may actually be higher due to unreported cases, with some banks said to be concealing fraud cases to protect their reputation.

“The growth in plastic money should serve to remind senior bankers of the urgency to migrate to use of chip and pin cards to ensure secure business environment,” said Bernard Matthewman, Paynet Group Chief Executive Officer.

Take a quick survey and help us improve our website!

Take a survey

“Daily, about Sh2 billion is moved through plastic money transaction making it a target to fraudsters and banks need to act urgently to curb loopholes that might impede growth of plastic money,” he said.

“Over the past few years we have seen a lot interest in the use of plastic money, this is basically due to an increase in the number of point of sales and innovations towards the same,” explained Stephen Nduati, CBK Head of National Payment System.

  “Cards are vulnerable to fraud, especially when magnetic stripe cards are used, we need to come up with better regulations to ensure safety,” he said.

He said CBK was considering coming up with laws that would see banks issuing customers with security compliant cards to beat fraudsters in their own game.

Other legislation the bank was working on includes harmonising cost of using cards by making commercial banks share their Automated Teller Machines.

Share this story
Bid to curb climate change launched
Kenya is slow in embracing technologies that can counter negative effects of climate change.The observation was made yesterday during an East Africa Climate Innovation Network (EACIN) conference in Nairobi.
I eagerly await my baby's first steps
Spina Bifida, and though rare in the general population, it is the most common neural tube defect in the world