Ghana is adding its voice to the global fight waged on mobile money fraudsters, following a revelation that the practice of stealing cash from e-wallets is growing in the country.
Figures on mobile money fraud churned out by the Ghana Telecommunications Chamber are not encouraging. Check this https://africaneye.soscodesoftware.com/fraud-alert-warning-mobile-money-fraud-on-the-rise-in-ghana/for the figures.
But mobile money operators in Ghana namely, MTN Mobile Money, TigoCash, Airtel Money and Vodafone Cash have been swift to blame the rise of menace on customers’ greed, ignorance and lack of education.
Mrs Ursula Owusu-Ekrofi
The Minister of Communications, Mrs Ursula Owusu-Ekuful shared the same view as expressed by the mobile money service companies.
She told African Eye Report in an interview: “Mobile money fraudsters have realized that because of the ignorance of people about the dangers involved in using these services, they can take advantage of it, so we can only step up education”.
“So, it is important to educate people never to release their Personal Identification Number (PIN) codes to people. They are all security features that protects a person from being defrauded”, Mrs Owusu-Ekuful explained.
“The code is just for you, whether you are receiving or sending money, do not give it to anyone. The minute you do that the person can access your mobile money wallet and take money from it”.
No telco will call you to produce your code on the phone, they can ask you some security questions but they will not ask for your pin codes, Mrs Owusu-Ekuful stated.
She used the opportunity to warn: ” If it is an award they tell you, you have won, go to the point of preference to claim it, do not send money for unseen goods”.
“Greed is part of it when people think they can get money out of nothing. It never works that way, you would be exposing yourself to even more danger and you will wake up one day to realize that your money is all gone”.
Fraud loss to telcos
According to Deloitte: “Globally, fraud loss in the telecom industry is in excess of two percent of total revenues, which is close to US$46 billion. The industry estimates fraud losses due to mobile wallet fraud to also be around 2-3 percent of the revenues generated by mobile money services, although there is limited information available on this topic”.
Mobile money fraud not only results in financial loss to customers or a mobile money provider, but it also damages the reputation of the service to the customer and risks the reputation of the industry as a whole, e-crime and cyber security experts said at a workshop on mobile money fraud organised by MTN Ghana in collaboration with the Journalists foe Business Advocacy (JBA) in Accra.
Why Mobile Money is Susceptible to Fraud ?
Developing economies including Ghana are relatively under banked but have in the last few years achieved very high mobile penetration rates.
In Ghana, banking started about a century ago, but only about 40 percent of Ghanaians have bank accounts, meaning majority of the population are unbanked. This unbanked population therefore use cash for transactions, excluding them from the formal financial system, i.e. access to savings, bank credit, mortgages, investment and other financial products.
In the last five years, however, mobile money has seen an astronomical growth, drawing thousands of the unbanked households into the financial inclusion net.
According to Bank of Ghana (BoG) data, as at 2012, the total value of mobile money transactions totaled GHS594.12 million. Significantly, as at December last year the value of transactions had reached GHS78.5 billion, indicating that within five years, mobile money transactions has grown by more than 13,000 percent. This is huge and promises a better future.
It is worth noting that the “UK’s Financial Services Authority” has labeled Mobile Money products as having a ‘greater impact than the Internet’ on the lives of users. However unlike typical product offerings from Service providers which involve only cash inflow in exchange for services offered, Mobile Money services far greater risks.
Some of the reasons
Mobile Money involves direct cash inflows and outflows between external entities such as subscribers, merchants, banks or retailers. Transaction data flow through multiple parties and tracking usage could be quite a daunting
task.
The typical mobile (easy access anywhere) nature of the product makes it an attractive proposition for the unscrupulous elements in the user base.
Researchers at Subex Limited, a leading global provider of Business Support Systems for Communications Service Providers noted: “Transactions may have very small values and hence go undetected in traditional Suspicious Activity Reports or High Usage Reports. Given the built-in anonymity and easy access nature of the product, it may even be targeted for terrorist funding and money laundering”.
Communication service providers popularly known in Ghana as telecom service providers themselves are new to financial services as compared to traditional banking and non-banking financial service providers. Thus it is evident that the Service Providers need to deal with far greater risks with Mobile Money products as compared to the products offered hitherto, according to them.
Mitigating the risk
As such, mitigating the risk of fraud is a primary objective in a robust risk management strategy in the country’s mobile money ecosystem, industry experts noted.
Mobile network operators (MNOs), banks and third parties in practice recognize that risk management is an essential pillar to the sustainable commercial success of a mobile money deployment.
To this end, MNOs with effective risk management strategies are aware of the complicated nature of mobile money and have invested dedicated resources to manage the fraud and revenue assurance activities.
“However, specific risk management strategies vary from operator to operator. Strategies are affected by numerous factors including stage of development, organisational structure, number of product offerings, regulatory environment and local market context”.
While the structure of managing fraud may differ, there is a common framework that is widely agreed to be the foundation to any risk management strategy in mobile money.
The framework, according to experts is composed of four elements that mobile money deployments use to manage risk: determine risk appetite, identify risks, establish controls and monitor effectiveness.
By Masahudu Ankiilu Kunateh, African Eye Report
