Central Switch to curb ATM fraud, enhance e-banking services

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Fraudulent activities  in the use of the Automated Teller Machine (ATM) and other e-banking services will soon be a thing of the past with full implementation of the Central Switch of the Central Bank of Nigeria (CBN). NCS is designed to provide interconnectivity and interoperability amongst approved electronic fund transfer (EFT) switch initiatives in Nigeria.


The Central Switch is expected to solve the problems of connectivity and other hitches while using ATMs or other e-banking products on Pont of Sales (POS) terminals. More so, efficiency in transactions will be better guaranteed, and assure lowered processing time for transactions, using any bank’s card within banking halls or any other bank outlet.


Managing director of the Card Center, speaking on how the policy will affect e-banking operations and customers, said it is a good development for both the operators and users of the cards.
He said Central Switch will solve the problems of connectivity and other hitches while using ATMs or other e-banking products on Pont of Sales (POS) terminals.


“I think it is good for everybody, it is just to make sure there is connectivity between all the individual networks. It simply means to connect to everybody by just being connected to the central switch.


“We know the likely players issuing cards, so once you connect to the switch, you connect to everybody and make the process easy for everybody. It means that when anybody comes out with a new card, you can easily deploy your card and all the POS terminals can easily be accessible. All ATMs can be easily accessible to all, it is a very good thing for everyone to connect to the central switch,” he stated.


He likened it to the cheque clearing system, whereby each bank accepts other banks’ cheques without any reservations, confident that it will be cleared eventually. “It is just like the central clearing system in place for cheques, it is not the same but almost similar, which means that your cheque can quickly be accepted in any bank.”


To a few other experts, the central switch will further deepen the financial services industry, leaving customers with multiple choices in their quest for efficient and effective services. The CBN had introduced a set of standards for the operation of transactions switching services in the country last month.


A switching company, according to the bank, shall operate its switch in accordance with the licence issued to it; open its network for reciprocal exchange of transactions/messages between it and the Central Switch before entering into agreement with member institutions.


Such agreement, it further stated, should specify in clear terms the responsibilities of each party, operational rules and procedures and liabilities of parties in the event of loss of funds arising from negligence of any of the parties.


Other responsibilities of switching companies, CBN said, include “ensuring that all notifications and information employees obtain in the course of discharging their responsibilities are treated as confidential; establish adequate security procedures to ensure the safety and security of its information and those of its clients, which shall include physical, transactions, logical, network and enterprise security; have a robust business continuity plan approved by the CBN; ensure full compliance with relevant provisions of the electronic banking and other guidelines issued by the CBN in relation to its operations,” among others.


The rights and responsibilities of member institutions/acquirers were also stated to include “entering into contract with merchants for accepting payment by means of electronic payment instrument, while other rights and responsibilities of card holders, merchants and central switch was clarified.”


Some experts view the regulatory guidelines as a laudable step since the speed of electronic banking in recent times, according to them; have aroused new challenges for regulatory bodies worldwide.



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