RBZ exerts pressure on banks

LIVINGSTONE MARUFU

 

The Reserve Bank of Zimbabwe (RBZ) is exerting pressure on local banks  to roll out   chip-based payment cards  as a means  of shielding  card users from  fraud  at point of sale terminals ,Business Times can report.

The banks have been given until the end of October this year to comply with the directive.

It comes at a time when depositors lost more than ZWL$9bn  last year due to card cloning. This has compelled the central bank to vigorously promote the use of cards that adhere to the Europay, Mastercard, and Visa (EMV) standards.

“To manage cyber security risk on payment cards, the market is urged to ensure that all card access devices and POS as well as MPOS access points are EMV compliant by October 2023.

“The bank continues to implore the financial sector to deploy risk-based systems in their surveillance of elevated threats especially given the dynamic digital innovations taking place worldwide. Board understanding of Anti-Money Laundering and Counter-Financing of Terrorism [AML-CFT] issues as well as internal controls are now critical areas for oversight. The bank continued to offer training programs to ensure compliance with AML/CFT regulations,” RBZ governor John Mangudya said.

Mangudya said the RBZ continues to encourage financial services providers to  accelerate the phasing out of non-EMV compliant access points and devices from the market as the adoption of the new cards  would protect card users from fraud at the point of sale machines and make magnetic stripe cards’ information impossible to copy.

Additionally, texpertise also carries security credentials that are encoded by the card issuer at the time each card is personalised for an individual cardholder using user-specific keys.

In order to safeguard customers against fraud at the point of sale, EMV uses a secret cryptographic key system. Embedded microprocessors are used in EMV, which also has other application capabilities.

The encoding of these credentials helps to prevent fraudsters from creating counterfeit cards.

EMV cards cannot be duplicated and utilised to complete fraudulent transactions, unlike mag-stripe cards, which are easy to duplicate because they lack the security features of the microprocessor chip.

It comes at a time when RBZ is battling money laundering and the financing of terrorism and proliferation risks in the payment, clearing, and settlement systems.

Mangudya urged payment service providers and banks to deploy appropriate regulatory technologies to enhance compliance given the heightened volumes and cyber risks.

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