•There have been emerging financial security threats targeting mobile and internet banking channels.
• KBA has launched the Kaa Chonjo! (Be Alert!) card, mobile and online safety awareness campaign intercepted in 2012.
Image: FILE
Increased use of cashless payments has failed to curb banking fraud and instead opened a new loophole for swindlers, bankers have said.
Kenya Bankers Association (KBA) said since the adoption of digital payments driven by the Covid-19 pandemic, there have been new financial security threats targeting mobile and internet banking.
KBA chief executive officer Habil Olaka said fraudsters are exploiting low levels of awareness on financial security to cause security breaches 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.
He spoke on Thursday at the launch of the Kaa Chonjo! (Be Alert!) card, mobile and online safety awareness campaign.
During the event, players in the financial, payments and retail sectors highlighted the importance of continuously empowering the public with information on fraud prevention.
The campaign was initiated in 2012, a time when ATM card skimming was a major challenge in card-based transactions.
In 2014, bankers said they observed a remarkable decline in this type of fraud with the adoption of Chip and PIN technology.
The Central Bank of Kenya in February developed the National Payment Strategy (NPS) for 2022 – 2025 to better regulate digital payments and achieve a secure, fast and efficient payments system.
According to the Kenya National Bureau of Statistics (KNBS) Economic Survey 2022 released Thursday total mobile money transfers increased from Sh5,214 billion in 2020 to Sh6,869 billion in 2021.
Over the past years, mobile money transactions, particularly merchant payments have become a substitute for card payments.
Card users face the risk of skimming when unscrupulous merchants swipe their cards, exposing their accounts to fraudsters, hence the general reluctance among some to use them for payments.
Kenya ranks third among countries that receive the most spam messages, averaging 102 per month per subscriber, according to data from Truecaller, the Stockholm-based caller identification app.
Merchant payments through Safaricom's M-Pesa have grown, especially during the Covid-19 pandemic.
According to Safaricom data, active Lipa na M-Pesa merchants have grown by 72.8 percent to 387,000, highlighting the impact of increased preference for cashless transactions.
Safaricom’s till and pay-bill service have risen to take an 85.8 percent market share of non-cash payments for ordinary goods and services, underlining the entrenchment of the mobile money platform in everyday transactions.