Alarm as fraudsters invade online payment platforms

Kenya Bankers Association Chief Executive Officer Habil Olaka(right) with the association's Director of Technical Services Fidelis Muia(left) during the launch of Chip and Pin technology for payment cards. The move is aimed at reducing card skimming which has been on the rise in the recent past taken on 12th May 2015. PHOTO: WILBERFORCE OKWIRI/STANDARD]

Fraudsters are moving their trade to online payment platforms after the banking industry successfully migrated all its members from using the old magnetic stripe cards to those that use Pin and Chip technology.

These new plastic cards feature an embedded micro-processor chip that provides enhanced security and other application capabilities compared to the traditional magnetic stripe.

Kenya Bankers Association (KBA) Chief Executive Officer Habil Olaka said migration to this new platform has forced fraudsters who can no longer engage in card skimming to shift to online platforms leading to a pick-up in incidences of electronic fraud.

Mr Olaka disclosed the new trend yesterday during a media update of where banks have reached in terms of migrating to the Chip and Pin cards. The association also launched its annual card & online safety awareness month, running through May, 2015. The campaign dubbed Kaa Chonjo! (Be Alert!) is coordinated  annually by the association on behalf of the sector.

"As banks continue to issue the new chip cards, we would like to urge the banking public to pick up their cards and use them. We also remind the public to remain vigilant with their PIN and security information," added Olaka.

During the month-long campaign, service providers are invited to educate the public on the importance of safeguarding their bank account details, including their PINs and Passwords, while transacting at ATMs and via mobile banking, online platforms and other channels.

Through the campaign, the banking public will also be reminded that they can use their new cards at Point of Sale locations, including at retail stores and supermarkets, to reduce dependency on cash and coins.

With migration of all banks to the Chip and Pin Technology cards, Kenya joins South Africa and Nigeria as the only countries to have successfully migrated to the this platform.

cards uptake

KBA Director of Technical Services Fidelis Muya, however, said though the association has noticed an increase in uptake of cards, use of the same to make purchases is still low.

"The assumption among users is that these cards are only meant to be used at ATMs. Most shoppers still walk to an ATM nearby to withdraw cash to make payments for their purchases at retail outlets," he added.

He said KBA is working to increase the number of Point of Sale (POS) terminals to enable more people use cards. Available figures indicate there are 13.9 million cards in circulation, 2,643 ATMs and 7,345 POS terminals.

"We expect the terminals to increase following a requirement by National Transport and Safety Authority that public vehicles install these gadgets on their vehicles," said Muia.