Research commissioned by Visa and First National Bank (FNB) indicates that South Africans use a debit or credit card to make more than 50% of their payments — a number that Galia Durbach, CEO of FNB Core Banking Solutions, believes should increase.
According to Durbach, the popularity of card-based transactional products is increasing.
“With the addition of debit cards as a payment mechanism to credit cards and petrol cards, the use of card-based transactions is on the rise. Furthermore, with the introduction of the Mzansi account for first-time banking, more South Africans than ever before have a bank card of some type,” she says.
To create greater awareness of safe card usage, First National Bank and Visa are together holding FNB Card Security Week from October 24 to 28.
This security week is geared to help consumers to get the most from their card-based banking products, helping them to avoid fraud.
“Card payments are in essence more cost effective and safer than using cash. Cash is risky, and can be costly — drawing money and depositing money all incur some cost for customers and in the event of theft, cash can never be recovered while lost or stolen credit or debit cards can be cancelled.
“By using card-based systems, the risks and costs of cash are taken out of the system,” Durbach explains.
Cards are also portable, and can be used internationally without the need for foreign exchange, with more than half of South Africans using their cards while travelling.
Visa International’s vice-president of risk management for Africa, Neil Hawkey, says the South African perception of risk around using cards as payment mechanisms continues to be relatively high, with 54% of Visa’s research sample reporting that they had security concerns when using cards while travelling in Africa.
Furthermore, about 36% of people did not know what procedure they should follow if they suspected being the victim of a card-related crime.
Durbach notes that criminals are always on the prowl looking for opportunities to abuse card-based systems; however, if card holders are aware of what to look out for and know their responsibilities should they fall victim, their risk of any loss is very low.
She says consumers should always be aware of the types of scams that criminals use.
“Some of the major scams that we’re seeing include card skimming, phishing and identity theft.”
Hawkey believes that the modus operandi of organised criminals has changed in the same way as the business world has.
“Travel and communication have been made easier and more accessible. Visa and the banks are using technology to mitigate the risk. With the issuing of chip-card technology throughout the world, criminals will face increased difficulty in operating and crime will be less viable.”
While great attention is being paid to card skimming, it is important that sight is not lost of the more traditional, less technologically advanced types of fraud, such as application fraud and card interception.
Card skimming involves the use of an electronic device that records the details of the magnetic stripe on a credit or debit card with a single swipe, giving the thief the details of the card, which can then be used elsewhere or to create a cloned card.
Phishing is a relatively new delivery method for an old fraud attempt, which is conducted using the telephone or e-mail. It entices card holders to part with their details on the pretext that it is the bank calling or requesting details by e-mail. Identity theft is perpetrated when a criminal assumes the identity of a customer to steal his or her funds.
Hawkey believes that “ten years ago, criminals would send a fax or call via the phone to obtain your personal details. Nowadays they use the internet. Just as you wouldn’t give somebody your details when they arrive at your front door asking for personal information, nor should you give this information away on the net.”
Durbach adds: “At FNB, we always advise customers to make use of InContact, the free SMS service that notifies customers each time a transaction takes place on their account. This serves as an early-warning system and will immediately alert customers to any suspicious transactions so that they can immediately put a stop to the card.
“During the course of FNB Card Security Week, in partnership with Visa, we will be conducting campaigns to educate every card user of the prevalence of these and other risks, helping them to identify suspicious activity and reduce the risk of becoming a target for fraudsters.
“By knowing what criminals are likely to try, learning how to avoid these crimes and knowing the process of reporting suspicious activity, customers will get the most from their payment cards,” Durbach concludes. — I-Net Bridge