Bank Customers React To Perforation Of Trapped ATM Cards

— May 19, 2014

Mixed reactions have continued to trail the latest policy of the Central Bank of Nigeria (CBN) which directs banks to destroy all trapped ATM cards, as many bank customers said the policy is a step backward for the cash-lite policy.
Speaking with LEADERSHIP variously, many bank customers condemned the policy, urging the CBN and banks to ensure that all ATMs are functional and well maintained before making such policy which according to them is not only time consuming but would be an additional burden on the customer.
Although the practice of destroying trapped ATM cards by perforation has been ongoing in most banks for months, the CBN last week in its approved “Guidelines for Card Issuance and Usage in Nigeria,” directed that any trapped card in the ATM be rendered unusable (by perforation) by the acquirer and returned to the issuer on the next working day.
According to one customer, “apart from the fact that I will have to pay for the new card, it is time wasting because that means I have to wait for weeks before I get another card. For me I don’t think it makes sense and the message they are sending is that we should start carrying cash around again.”
Another customer who identified himself as Ayo stated that the “policy is against the drive of the apex bank to promote the cashless policy as confiscating trapped cards will only discourage people from using cards and applicable means i.e. POS, ATM, online shopping.
“What happens to folks that are still learning how to use the cards? People like that easily get their cards trapped trying to learn and they should be considered. Even me, on two occasions I left my card unintentionally after getting the cash and had to go retrieve it days after. We understand that CBN is trying to help the banks make money as several streams of their income have been heavily regulated and some totally blocked but this policy is a killer of our cashless vision.”
For one student, Chisom, “they just want to take undue advantage to cheat on the customers. If a card is trapped the owner might not be at fault at all. Many times the service will suddenly go off and before the card owner knows what is happening the card would be swallowed up by the machine. Does this mean that the customers must be penalised for failure of the bank?”
Narrating his ordeal, a trader, Sefiu Adebayo said “last Easter on Good Friday, I withdrew N20, 000, the ATM dispensed the cash brought out the card a bit, I tried to retrieve it but couldn’t. That’s how the ATM swallowed my card in my presence. Thank God for my wife that borrowed me money that I used for the Easter celebration. I went first working the bank on the first working day which was Tuesday and they asked me to apply for another. It took them one month to give me and they were charging each time I used the banking hall to withdraw small amount.”
Reacting to the policy, another bank customer who declined to mention his name noted that “some bank policies are made based on experience. It is possible that whoever came up with it experienced a fraud issue involving releasing trapped cards to non-owners. I would not crucify anyone just yet. We all know policies cannot make everyone happy. It favours a few. So I will advise you use your bank ATM to make withdrawals and/or make a forecast of your cash need and withdraw from the bank ahead of a weekend so you don’t get broke. Alternatively, a lot of shops/vendors now have POS machines so save your liquid cash and pay with a POS.”
The policy was also commended by another customer who described it as a good development. According to the customer, “you certainly would not appreciate it except you have once been a victim of ATM card fraud. Once your card is no longer in your possession, anyone can transact with it by just using your serial number and the three digit code at the back of the card for online transaction, anyone including bank employees. Once the card is trapped and has to go from hand to hand, it is already compromised and it could be used in future long after it’s been returned to you.”
Director, banking and payment system department of the CBN, Mr. Dipo Fatokun had at the weekend described the policy as a global practice, pointing out that the policy does not only apply to other banks’ ATMs alone, saying that cards trapped in issuing banks’ ATMs would also be perforated.
According to Fatokun, the central bank introduced the policy in order to protect bank customers, adding that the apex bank is collaborating with banks to lessen the burden of the policy on cardholders. “We are working with the banks to ensure that when these cards are trapped, not because the customer did something wrongly, and a new card is to be issued to the customer, we are discussing on how it would be done such that the burden would not fall wholly on the cardholders.
“We have also discussed with the banks to ensure that cards that are trapped can be communicated electronically between the acquirer on which the card was trapped and the issuer of the card. Furthermore, he noted that for cards trapped in issuing banks’ ATMs, if the machine is located within the premises and the cardholder goes into the banking hall to report the situation, the bank may decide to retrieve the card immediately and return same to the customer without perforating it.
However, for trapped issuing banks’ ATMs located off-site, he said the financial institution may decide to invoke the provision of that guideline to issue the customer another card and perforate that one that was trapped.