Safaricom, Kenya’s leading mobile network operator, has introduced a new technology called “ATM Vicinity Check” to help prevent banking fraud in the country. The solution, which is being offered for free to commercial banks, is designed to tie ATM transactions to the physical location of the genuine account owner.
The rising cases of banking fraud in Kenya have been a major concern for customers and financial institutions alike. Criminals use various tactics to steal funds from cash machines, including cloning ATM cards, trapping the cards at machines, collecting information on the cards, and withdrawing cash from a victim’s account using M-Pesa.
Safaricom’s latest solution aims to tackle ATM fraud by cross-checking the location of the ATM and the customer making a withdrawal request. The technology relies on the location of the cell phone mast that serves the customer to confirm their physical location. If the ATM and the customer are not in the same location, the transaction will be denied, significantly increasing the difficulty of fraudsters attempting to carry out their fraudulent schemes.
After the success of its SIM-Swap-Check solution, Safaricom has now launched the ATM Vicinity Check technology to tackle ATM fraud. The new technology provides commercial banks with an Application Programming Interface (API) that allows them to check the date when a customer’s SIM card was last swapped. This information empowers banks to assess the probability of a customer’s transaction being fraudulent and decide on the appropriate actions to be taken.
According to Safaricom’s CEO, Peter Ndegwa, the expansion of Kenya’s fintech industry has brought about a constantly changing threat environment that affects both fintech operators and their customers. To address this issue, Safaricom has created the SIM-Swap-Check and ATM Vicinity Check solutions, which are now available to commercial banks. These solutions are designed to assist banks in reducing the occurrence of fraudulent transactions.
According to a Visa Global Risk Investigations report, criminals who previously operated in cyberspaces are now shifting their targets to physical points of vulnerability as in-person commerce resumes to pre-Covid levels. As in-person commerce returns to pre-pandemic levels, crooks are back to exploiting the physical points of vulnerability in stores, while continuing to capitalise on e-commerce through malware, ransomware and phishing attacks, among others.
This development underscores the importance of innovative solutions to prevent banking fraud. The ATM Vicinity Check technology is expected to reduce the number of ATM fraud cases in Kenya and provide a safer environment for customers to conduct their financial transactions.