06/09/2021
AVOIDING POS FRAUD
Whenever a new thing shows up on the scene, nefarious people take advantage of the scarcity of knowledge in the subject matter to swindle unsuspecting people who have heard of the opportunities but are yet to understand it fully.
For example, every time a new note is introduced, we usually see lots of people fall victim to fake notes syndrome. Similarly, a lot of people have fallen for crypto currencies and bitcoin exchange shenanigans. What about forex trading? As much as all these can be legitimate if well understood and well researched, especially as to the pedigree of the people you are dealing with; having a website to show as evidence of being genuine is not enough.
The rise of agency banking (POS Business) has had its share of fraud victims at different levels too. This article is to shed light on how you can shield yourself as: (1) a potential POS agent, (2) a regular patrons of POS agents and (3) a POS agent from fraudulent activities out there.
Agency banking (POS Business) can legitimately make a vast majority of the population to be financially inclusive. It is also able to increase economic activities for people who have been underserved for long, as is the case in Kenya, India and now growing fast in Nigeria. For perspective, a major player in the space, OPAY as it is popularly known, for whom I am an aggregator just raised funds and reached a capitalization higher than most of commercial banks in Nigeria in just 3 years of incorporation.
Agency banking provides basic financial services such as withdrawals, transfers, bills payment and even micro credit can be made available to small businesses. It also helps with cash management for retail business owners, and more people can be brought under the economic umbrella. POS agents too have found the business to be a reasonably rewarding economic activity to be engaged in. Now the question for everyone would be, how does one take advantage of this trend and not be at risk of being defrauded by these nefarious fraudsters who obviously are still having a field day because of low awareness of this emerging industry:
1. As a potential POS agent operator identify which POS Company you want to go with and find their credible contacts. Most of these POS companies have adopted the system of aggregation, whereby aggregators are properly registered and can be traced if they get involved in any kind of shoddy deals. Some of the time, aggregators even have enough skin in the game as to investing in POS acquisition before deploying to potential agents. At this stage, fraud takes the form of having a potential agent download the app with the promise that the POS will be free from all kinds of charges. Potential agents are then advised to fund the account. At this time, the fraudster has already built some level of trust and now ask for the login details of the account. Meanwhile, the fraudster is impersonating as a staff of the company whose POS you intend to acquire. Through this means, fraud has been perpetrated on so many unsuspecting persons and it is not limited to only one operator as some may want you to believe. The rule to mitigate against this is not to give your login details or one time password (OTP) to anyone. By the way this also applies to regular banking relationships.
2. As a regular patron of POS terminals, make sure you transact where you are familiar with and if that is not possible, find a stable business owner with POS service available in a place you can easily reference. A case was heard of a woman who only withdrew N6,000 at a location in Lagos, thereafter, a withdrawal of N250,000 was done on her account in the next 2 days. Fortunately, she was able pin down the perpetrator and recover her funds back. This may be possible by probably using a fictious POS to capture your PIN number while you are transacting with the perpetrator. So, transacting at a place where you can trust is a mitigating factor against this risk.
3. Finally, as a POS agent, avoid a rush situation. Somebody can withdraw and get the money and decides he or she wants to abort the process. While you are still trying to figure out what is happening, he or she may substitute the cash with fake notes, lower Naira denomination notes and so on. The key here, is to avoid a rush situation. There has also been a situation where a withdrawal was made, the fraudster goes to his or her bank to report that the withdrawal was not successful. Thereby, getting a refund and such that the agent bears the burden.
Agency banking (POS business) is still lucrative and growing at this time for the industry, but one must be careful of the landmine of fraudsters who in many cases gain from other people’s pain.
We can all put them out of business by being adequately informed and take proper caution.
