The agent banking system, commonly referred to as Point of Sales (POS) began which began to spread in Nigeria in 2013 after the Central Bank of Nigeria (CBN) introduced the system, is one which is thriving in various parts of the country as it opens a new portal for financial services to reach bank customers in remote areas in the society.
The POS business which is making waves in the country is gradually becoming one of the most worthwhile business ventures any entrepreneur can thrive with, in Nigeria as it also performs other transactions such as the payment of utility bills.
Over time, the curiosity of Nigerians has been risen over the authenticity of POS services, as fraudulent activities have been reported in various parts of the country. To that end, a good number of POS operators have been arrested by either anti-graft agencies or security operatives.
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In Kano state just like other states, POS operators have been nabbed over their alleged involvement in fraudulent transactions. Thus, the relatives and colleagues of POS operators in the state have cried out over the continued detainment of their loved ones for financial crimes which they say the operators didn’t commit.
In an exclusive interview with Daily News24, Alhaji Salihu Umar, the national president of the Association of Mobile Money Operators of Nigeria (AMMON) stated that 90 percent of POS operators who are in the custody of the security operatives in the state are arrested for offenses they are oblivious of, emphasizing that fraudsters use POS operators as soft targets to carry out fraudulent activities.
He said that the lack of adequate knowledge on agency banking by some POS operators is what the fraudsters leverage, to carry out their nefarious activities, thereby, roping the operators into financial crimes they are not aware of.
‘When some of the fraudsters notice any operator, who lacks much experience in agency banking, they use them to commit a financial crime and no matter how long it takes, the crime will be traced to the operator’s POS and will be the culprit and If the operator does not have a good ‘Know Your Customer (KYC) system, the individual will surely be arrested when alleged such crime.
Record keeping as a challenge
Alhaji Umar said poor record-keeping by POS operators is a major reason why some of them get used as a tool for fraud. He believes that POS operators who do not have a good KYC system are vulnerable to fraud. He explained that the KYC system entails getting the required contact details of customers such as phone numbers, house addresses, and other contact details.
”If the POS operators have a good KYC system and any fraudulent transaction takes place using their outlet, the police or anti-graft agencies will be able to locate the perpetrators of the fraud, and the agent will be safe but in situations where they don’t they will be held responsible for the crime.” He stated.
Banks regarding POS agents as competitors
Alhaji Umar is certain that some difficult experiences which creates a gap between POS operators and customers emanate from some financial institutions, which further exacerbates tension in the minds of some customers and oftentimes regard certain POS operators as fraudsters.
”Whenever a transaction fails, a receipt will be generated indicating that the transaction had failed but sometimes, the customer’s account could be debited, and following that, the operator will tell the customer to report the incident to the bank. If the customer isn’t lucky enough to meet a bank staff who isn’t so knowledgeable about agency banking, the highest the staff will do is to print an account statement stating that the customer’s account was debited and the person’s money is with the agent.
”That is a huge challenge because the account statement isn’t stating where the money is, rather it will show that the funds had been withdrawn through a certain POS. Since the money has been withdrawn through the agent’s POS, accusing fingers will be pointed to the operator. What the bank is supposed to do is to give the customer a ‘quick resolution form’ and process a refund on behalf of the customer through the other regulatory bodies.
He notes that when hiccups happen during transactions, the customers most at times, usually have a divided mind, as they mistrust the agency banking operators, adding that when banks send customers back to the POS operators over a failed transaction where a debit had been made, the customers go straight to the security operatives or anti-graft agencies to report fraud.
”If care isn’t taken, the customer might not go to the POS agent, rather the person will go to the police and report a case of fraud by the operator. Because some of the security operatives do not know how agency banking operates, they could go ahead to mandate that the POS operator pay the customer which is not right because the agents are not supposed to refund customers over a failed transaction because it is the bank that is supposed to rectify the issue and refund the customer.” He stressed.
He also said that AMMON is doing its best to ensure that those who have been illegally detained by security operatives in the state regain their freedom. ”For those operators who are our registered members whose hands are clean and are in detention because of an unfortunate situation all hands are on deck to see that justice prevails because we stand by our members no matter what” He assured.
AMMON doesn’t interfere in confirmed fraudulent cases
While stating that he has lost count of the number of fraud cases that had been reported in Kano state overtime, he stated that AMMON does not interfere in situations where investigation shows that a particular POS operator is confirmed to connive with fraudsters or is a fraudster.
”If we realize that an operator has a selfish interest and is a party to any fraud which has been reported and is in the custody of either the police or anti-graft agency, we do not interfere in such cases. As an association, we organize trainings for our members and for those who are newly starting the agency banking business and when there is a case in which the POS operator is a confirmed accomplice to any fraudulent crime, we allow the law to take its course.” He clarified.
The national president called on the CBN to provide a regulatory framework to guide the conduct of agency banking in the country as it would aid in the mode of operation for agency banking. He also sought the cooperation of Banks towards the manner in which they handle cases relating to failed transactions that emanate from agency banking outlets.
Arrested POS agents usually don’t follow due diligence – EFCC
Mr Faruk Dogondaji, the Kano state zonal commander of the Economic and Financial Crimes Commission while speaking to Daily News24 through the Zone’s Head of public relations Mr Idris Isiyaku, said that most POS operators who have been arrested over time are either party to the crime or do not follow due diligence as stipulated by the CBN, and get used by fraudsters to carry out fraudulent transactions.
He stated that ”POS operators are supposed to carry out transactions with ATM cards but oftentimes, some of that allow USSD or bank transfer transactions which is against the guidelines for POS operations, as stipulated by the CBN and oftentimes end up in trouble. Certain fraudsters make transactions with stolen ATM cards and when complaints are brought, such financial crimes are traced to POS operators, and investigations are carried out.” He said
While stating that the anti-graft agency has discharged all cases relating to agency banking, he warned all POS operators in the state to get full training on the agent banking system and to also get the details of their customers to avoid being involved in financial crimes.
