PoS fraud is a common occurrence in Nigeria…

Since its introduction by the Central Bank of Nigeria in 2012, Point of Sales (PoS) terminals have become some of the most popular transaction channels among Nigerians.

There are currently over 1.1 million PoS terminals across the country. And according to the Nigeria Inter-Bank Settlement Systems (NIBSS), the value of transactions carried out on PoS terminals in the country peaked at N6.1 trillion in September 2022.

The rise in the adoption of PoS activities is expected. It’s an easier channel for citizens to withdraw money, and make transfers and deposits without the stress of visiting their banks.

Despite the ease carrying out transactions at PoS terminals provides, however, many customers have their reservations.

Why are PoS transactions still a big turn-off for many customers?

A significant disadvantage of PoS transactions is their high failure rates. The failure rate of card transactions on POS terminals, according to the NIBSS, ranges between 13% and 15%. This means that 13 to 15 in every 100 card payment attempts on the terminal would fail.

Yet, one major reason many customers are wary of using their bank cards in PoS machines is because of exposure to fraud.

There have been many reported cases of customers losing their entire savings after receiving repeated debit alerts from transactions they did not initiate or authorise, despite having their bank card in their possession. In some of these instances, the fraudulent transactions have been traced to PoS terminals where the customer once used a machine to withdraw or transfer money.

How does PoS fraud happen?

At PoS terminals, customers are mostly required to hand over their card for an operator to insert into the machine, and many customers believe that their critical details such as name, card expiration date, and Card Verification Value(CVV) could be illegally taken this way.

Many victims of PoS fraud have recounted how, after reporting fraudulent withdrawals on their bank accounts to their operating banks, they were informed that their card details had been illegally extracted.

The fraudsters proceed to use the information to withdraw the funds from the victim’s account or make online purchases.

This scenario leads to a lack of trust in the transparency of PoS operators when handling customers’ cards to initiate transactions. And many customers, despite the stress involved, prefer to walk into banking halls or queue at ATM points to make card transactions.

How can you gain customer trust as a PoS agent?

As a PoS operator, you need to adopt new strategies to convince sceptical customers to visit your kiosk to withdraw, transfer money, or perform other transactions without being exposed to the possibility of PoS fraud.

One way you can achieve this is by making your service cardless. You can receive funds without requiring your customers’ bank cards through bank transfer.

You should, however, be wary about the high chances of delayed or failed transfers arising from inter-bank network issues.

Using unique virtual accounts (temporary account numbers generated online) will help you solve this problem.

How can virtual accounts help you to operate better?

As a PoS operator, it would be inconvenient and time-consuming for you to walk into all traditional banks to open an account.

Virtual accounts, on the other hand, are easy-to-generate online accounts that attract low service costs compared to physical bank accounts.

If you want to provide your customers with virtual accounts that offer different bank options to reduce the chances of failed transfers, our unique virtual accounts are specially tailored to allow you to do that.

How will virtual accounts solve PoS fraud?

Using virtual accounts for your PoS business has many advantages for you and your customers.

• When you use virtual accounts for your PoS business, your customers will no longer need to present their bank cards at the point of withdrawals or transfers. This means they will not be exposed to a high chance of losing their cards or having their private card details stolen by fraudsters.

• You will also reduce the risk of taking costly losses due to reversals to customer accounts when card transactions are affected by bank network issues.

Fraud causes immeasurable pain and setback for victims and you should show your customers you care about helping them to protect their money.

Sign up for our virtual accounts with unique benefits to play an active part in mitigating fraud rates on PoS terminals and gain customer trust today!