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Fraudsters Using New Ways to Target Cashless Transactions- Bankers

Fraudsters develop new ways to steal electronic cash

Electronic transactions have opened a loophole for fraudsters, failing to combat risks associated with cashless payments. According to the Kenya Bankers Association (KBA), the mobile and banking industry has faced new threats since the Covid-19 pandemic period when they became popular.

KBA Chief Executive Officer Habil Olaka said fraudsters had devised new ways of circumventing security on contactless payment platforms.

“Over the past few years, cases of social engineering and identity theft have persisted. Similarly, cases of phishing emails, malware attacks and baiting have scaled up in tandem with the enhanced uptake of internet and mobile transaction platforms,” Olaka said.

Read: College Student with Sh102 Million in Bank Account Wants Cash Back, Accuses State of Tarnishing her Name

Olaka was speaking on Thursday during the launch of Kaa Chonjo! (Be Alert!) card, mobile and online safety awareness campaign. During the event, participants from the banking, payments, and retail sectors emphasized the necessity of continuing to educate the public about fraud prevention.

The initiative rolled out in 2012, when ATM card skimming was a significant problem in card-based transactions. The deployment of chip and PIN technology in 2014 led to a decline in this form of fraud.

The Central Bank of Kenya rolled out the National Payment Strategy (NPS) for 2022–2025 in February to better regulate digital payments and achieve a safe, rapid, and efficient payments system.

Read also: How M-pesa and Other Cashless Transaction Mediums Are Helping in the Fight Against Covid-19

Total mobile money transfers climbed from Sh5,214 billion in 2020 to Sh6,869 billion in 2021, according to the Kenya National Bureau of Statistics (KNBS) Economic Survey 2022 issued Thursday.

The Ministry of Health recommended cashless transactions in 2020 as a way to curb the spread of Covid-19. Since then, the option has become popular, with Safaricom recording a 72.8 percent climb in M-pesa merchants to 387,000.

According to data from Stockholm-based caller identification software, Truecaller, Kenya ranks third among nations that receive the most spam messages, with an average of 102 per month per subscriber.

Card users risk being defrauded when unscrupulous merchants swipe their cards, exposing their accounts to fraudsters. This explains why some people are hesitant to use them for payments.

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Written by Vanessa Murrey

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