South African authorities warn about risks associated with EFT payments

Friday 27 November 2020 09:25 CET | News

The South African Reserve Bank (SARB) has issued a warning to consumers to be aware of the risks associated with the use of instant electronic funds transfer (EFT) payment services offered at ecommerce stores.

An instant EFT is a payment method offered by a third party, in partnership with ecommerce stores, which automates the initiation of payments for consumers to ecommerce stores and also provides immediate confirmation of payment to the ecommerce store to enable them to dispatch the goods or services purchased.

Instant EFT payments use a method called ‘screen scraping’, which makes it possible for third parties to access bank account data and automate actions on behalf of a consumer using that consumer’s online banking access credentials.

In a statement, the SARB, the Financial Sector Conduct Authority (FSCA), and the Payments Association of South Africa (PASA) said they do not support the use of screen scraping to effect payments, given that it exposes consumers to the risks, including data privacy, fraud risk and breach of contractual agreements.

The SARB, FSCA and the payments industry said the method of using screen scraping to effect payments puts consumers’ access credentials at risk of being compromised.

The SARB also warned that rogue entities might pose as third parties offering instant EFT services on fake ecommerce sites to capture consumers’ access credentials for their bank’s Internet banking websites.

The SARB further warned that by providing their Internet banking login credentials to a third party, consumers that use instant EFT products might be in breach of their banks’ terms and conditions which regulate Internet banking. As a result, it said, knowingly or unknowingly, consumers might be giving up their rights of recourse and any legal protection in the event of suffering fraud and/or subsequent loss.

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Keywords: South Africa, EFT payments, online payments, ecommerce, security, online fraud, screen scraping
Categories: Fraud & Financial Crime
Countries: South Africa
This article is part of category

Fraud & Financial Crime