These range form epileptic service delivery, frequent abuse of the regulations guiding its operations by operators to outright fraud.
To stem this ugly tide, the Central Bank of Nigeria (CBN) had last week rolled out penalties for non-compliance with its guidelines on Automated Teller Machines (ATM) operations in the country.
In a circular to all banks and ATM acquirers posted on its website, the apex bank bemoaned the lack of cooperation and deliberate attempt by some players in the e-payment market to frustrate the policy on offsite ATMs of deposit money banks, noting that, the CBN’s circulars and guidelines on ATM operations in Nigeria have been disregarded with impunity.
Earlier on, the apex bank had stipulated in its standards and guidelines on ATM operations in Nigeria that “banks shall only deploy ATMs within their premises while the deployment of ATMs outside banks’ premises should be left to CBN approved consortia provided that no card scheme or any company that a scheme has shareholdings ownership of more than 20 per cent will be licensed as ATM owner or acquirer.
Also, the guideline had stipulated under ATM security that “every ATM shall view and record all persons using the machines and every activity at the ATM including but not limited to card insertion, PIN entry, transaction selection, cash withdrawal, card taking, among others.”
It, however, pointed out that such cameras should not be able to record the keystrokes of customers using the ATM.
Therefore, to ensure compliance with these rules and more, the apex bank through yesterday’s circular stipulated that for non compliance with Payment Card Industry Data Security Standards (PCIDSS) a fine of N50, 000 per week will apply until compliance is established, adding that non compliance of ATM terminals with Europay Mastercard and VISA (EMV) levels one and two, will attract a fine of N50, 000 and temporary suspension of the affected terminal until compliance is established.
Similarly, the CBN stated that non compliance with migration to EMV after September 30, 2010, will attract a fine of N50, 000 and issuer will bear full liability for any fraud perpetrated with the mag-stripe card, adding that failure to provide audit trails and journals for ATM transactions will attract a fine of N50, 000 per week.
Failure to have two per cent of ATMs deployed with tactile graphic symbol for the use of visual impaired customers within the five-year timeline will attract a fine of N50, 000 per week, the circular warned, stressing also that failure to comply with the new policy of offsite ATM deployment will attract a fine of N50, 000 per week until compliance is established.
Other penalties unfolded by the apex bank are
• failure to establish help desk contacts will attract a fine of N50, 000 for each day of infraction,
•non-functional help desk contacts will attract a fine of N50, 000 for each day of infraction,
• failure to disclose ATM surcharge to customers, a refund of the surcharge to the affected customers will be enforced by the CBN, and
• for lack of online monitoring mechanism and back-up power (inverter) for ATM, a fine of N50, 000 per day, will apply.
Others are an ATM without a camera installed will attract a fine of N50, 000 and deactivation of ATM until the camera is installed,
• a fine of N50, 000 per day will be applied for late submission of returns/data on ATM frauds when required,
• an ATM deplore will be made to refund the full amount involved in any fraud perpetrated on its ATM for failure to provide footages on the disputed transactions when required,
• failure to respond to the customer or to the CBN on ATM complaints within 72 hours will attract a fine of N50, 000 per day for each complaint after the 72 hours until the response is received, and
• failure to resolve any ATM dispute with evidence of resolution within 14 days, the deployer will refund the total amount involved in the fraud.
However, other non-monetary sanctions that could be applied to the erring institutions, according to the CBN, include naming the offenders at the Bankers’ Committee forum, suspension of offenders from participating in clearing operations until the infraction is corrected, and suspension of offenders from participation in RTGS operations until the infraction is corrected.
The penalties, the apex bank warned, take immediate effect.
Reacting to the development, a banker, Olusegun Ajayi, told The Guardian, that the step taken by the apex bank was in order, noting that if operators did not obey the regulation, then the entire ATM operation in the country would be fraught with danger.
Also, another banker, Chike Eze noted that it was important for banks and other operators to run their ATMs the way it is done abroad, arguing that, without that, the entire financial system would be worse for it.
He noted that since the coming on board of ATMs in Nigeria, most people had come to depend on it for their emergency cash instead of heading for the banks.
This attribute, he pointed out, should be encouraged, as it had helped tremendously in decongesting the banking halls across the landscape.
The concept of setting up a nationwide Electronic Funds Transfer and Transaction Processing & Switching entity has been a subject for discussion for years in many quarters. However, the process that lead to the formation of InterSwitch Limited started in early 2001 when Telnet Nigeria Limited invited some banks to share its vision of setting up a national payments switch.
Telnet invited Accenture in early 2001 to work with its Business Solutions Architects to develop a business case for a national switch. The outcome of the business case led to the expansion of the original contract to cover a full business plan for InterSwitch. This business plan was completed in Q1 2001.
One of the key success factors identified in the course of developing the business plan was the need to get the buy-in of banks that shared the same vision. These banks were contacted and the first all-parties meeting to set up a national switch was held at Eko Hotel Le Meridien in December 2001.
Three committees comprising a Business Track, Technical Track, Operations & Settlement Track, as well as a Core Project Team were set up to work towards making the InterSwitch dream a reality.
The company started operation in December 2002, and achieved the first interbank ATM transaction in Nigeria in October 2003.
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