Hacking: Nigerian banks reject foreign ATM cards

The Central Bank of Nigeria’s cash-less policy drive is facing threats as the majority of the Automated Teller Machines in the country are rejecting bank cards issued by foreign lenders for fear of possible invasion by hackers.

Sources revealed that Nigerian banks were refusing to grant access on their terminals to ATM cards issued by foreign banks.

The development, it was learnt, had caused foreigners coming into the country and Nigerians, who have ATM cards issued abroad, to take their complaints to the central bank.

Top banking officials revealed that the CBN had written to all the financial institutions in the country and some payment technology firms in a bid to address the problem.

According to the sources, the development has made some of the banks to grant access to some foreign ATM cards.

A top banker familiar with the situation, who spoke under the condition of anonymity because he was not authorised to speak on the matter, said, “Banks are not making it possible for ATM cards not issued in Nigeria to be used on ATM terminals in the country. The reason is that the banks want to curtail the activities of hackers because some hackers bring foreign ATM cards to hack into the ATMs.

“This is why the banks made it impossible for ATM cards not issued in Nigeria to be used in the country. But since the CBN intervened, some banks have started to allow foreign ATM cards to be used on their machines. Not all the banks have agreed to this yet and we can’t blame them because some of the foreign ATM cards can be used to hack into the ATM terminals.”

The source said the CBN chose to intervene because the action was capable of undermining its cash-less policy drive.

However, it was learnt that since most of the banks had begun installing anti-skimming devices on their ATMs in line with the CBN directive, most of them would now grant unlimited access to foreign ATM cards.

An email requesting for the CBN’s position on the matter had yet to be replied as of the time of filing this report.

The CBN spokesman, Mr. Isaac Okorafor, promised to get a response from the appropriate department as soon as possible.

The central bank had in March ordered all Deposit Money Banks to install anti-skimming devices on their ATMs on or before June 1, 2014, following the alarming rate of ATM-related frauds across the country.

The CBN said failure to do so would attract severe penalties as it would invoke appropriate sanctions for non-compliance in line with the regulations guiding ATM security.

The directive was contained in a circular dated March 5, 2014, which read in part, “The CBN has observed with satisfaction the growth in the adoption of ATMs by Nigerians as one of the channels of e-payment. The bank is, therefore, committed to ensuring that the deployment and management of ATMs are in line with global best practices.

“However, we have observed with dismay the upward increase in the number of ATM-related frauds in the banking system. This development does not portend good news for the industry and requires urgent steps to curb the abuse.

“Consequently, in addition to the existing guidelines on card-related frauds and in order to guard card-skimming at ATM channel across the country, all DMBs are hereby mandated to comply with the provisions of Section 3.2 ATM operations and Section 3.4 ATM security of the Standards and Guidelines on ATM operations in Nigeria, and also install risk-mitigating devices on their ATM terminals on or before June 1, 2014.”

The Chairman, Committee of E-Banking Heads, Mr. Chuks Iku, had last month said banks would comply with the directive before the expiration of the deadline.