Stakeholders identify fraud risks among PTADs, merchants

Stakeholders in the Point of Sale terminal (PoS) payment ecosystem have decried absence of governance principle among some Payment Terminal Application Developers (PTADs) and merchants as responsible for fraud in the PoS transaction system.

They spoke at the second PoS Innovation Summit held in Lagos on the theme; Secured PoS Transactions.

Wale Obadare, chief operating officer, Digital Encode, who delivered the keynote at the event, stated that much of the security breaches in the system are done by PTAD is the process of programming and repair of PoS devices.

He explained that some merchants collaborate with terminal code writers to steal card information of customers as well as divert value of transaction from genuine merchants to others accounts. This according to him is made possible because settlements of transactions by merchants are not done instantly.

“There is need for corporate governance by PTAD and merchants in view of lack of proper architecture, design, implementation and operation in the system,” he added.

Corroborating Obadare, Mrs. Perry Osage, chief financial officer, Cash & Carry, Abuja, narrated how her company sent one of their PoS devices for repair on returning of the device they noticed that transactions on the device were crediting another account that is not of Cash & Carry.

She urged players in the ecosystem to resolve the issue of transactions decline without value to merchant but debit alert to customer.

Tunde Ogungbade, managing director, Global Accelerex, organizers of the summit, said that security is important for both the consumer and the merchants which is part of efforts to bring innovation to point of sale terminal transactions.

“We should not only be thinking of innovation with the payment or what happens before or after the payment but should be concerned about securing the payment. It is not only making sure it is flawless or seamless but also secured. That informed looking inwards to say what are the issues hindering adoption? After talking to consumers and merchants, we realized that they are concerned about security of their transactions and ask questions such as, how to resolve transactions decline while customer gets alert and merchant did not get value, when I use my card is it safe and secured?

“We have looked at how to bring innovation to securing transaction processes in the use of PoS as well as various areas attack surface can exist. Attack surfaces on the card, terminal and payment system networks, we need to look at attack system in a broad dimension,” he said.

He added that central bank of Nigeria (CBN) has led a framework for innovation; stakeholders are expected to build on the framework and see how to operationalize it.

“Innovation we are talking about is to implement best practices looking at technology, processing and players to ensure that both consumers and merchants can have confidence in the use of PoS.

“What happens in PoS payment system is exactly what happened on ATM in terms of confidence. Part of the reasons why confidence was built on the ATM is because it dispenses cash, let’s take that experience and lesson of ATM and apply it to PoS, so that people can have that same kind of confidence in the use of PoS, this will help drive adoption of PoS as a means of payment,” he stated.