In December 2007, I was sharing my frustration about GT Bank Nigeria in a blog post titled: Woes of a Nigerian Internet Banking Customer. Till date, things have virtually remained the same - 3rd party funds transfer using the Internet Banking facility offered by GT Bank is still restricted. Well, things have just got even worse.
Just a few days ago, I discovered ReloadNG.com and attempted to buy some MTN airtime from the website for a friend in Nigeria. I signed-up and attempted to pay using my GTB-issued Interswitch card but got an error: Card restricted. I was terribly confused since I was very sure I had entered the right PIN. After a couple of other attempts, I gave up. It crossed my mind that Interswitch had restricted my card because I was using it online from Ghana (I now know they’re not that sophisticated anyway) but I can confirm this is not the case.
How did I confirm? I used the QuickTeller facility available via Interswitch’s website and I could access my bank account balance as well as the last few transactions. Bottomline, my card is active and my PIN is not wrong.
I got the clue to whats going on through Nairaland this morning:
Due to the high rate of debit card fraud
sin Nigeria, some banks have started blocking the online feature of ATM cards. So this restricts the use of these cards to ATM machines only.What now happens to folk that spent 150k to incorporate Interswitch to their websites? I guess most of these Nigerian Banks did not really do their homework properly before introducing these online innovations here in Nigeria.
We are back to the days of endless queues at the banks, even to make paltry payments for services.
To think that just yesterday I was calling on Interswitch to lower their fees?
I always knew that the whole security behind many Internet Banking platforms and debit card systems in Nigeria was very weak. To make payment via the Internet using an Interswitch card, only the card number, PIN and probably the expiry date are authorized in real time. Billing address, card holder’s name and telephone number, are not checked. Thus, just about anyone who has the basic card information can spend it online using any name, address and telephone number. A merchant is therefore unable to verify that the buyer is really the card owner. 
This security lapse makes Interswitch cardholders ripe candidates for phishing emails.
Online fraud is neither new nor exclusive to Nigeria. We need to find working solutions to minimize online fraud. The Interswitch system needs to be thoroughly revamped. The system must necessarily come with advanced security features. Turning-off the system entirely will only move us back to the stone ages of queueing in the banking halls and ultimately make doing business online from Nigeria very difficult.
Are you a resident of Nigeria and a user of any of the discussed services? What are your thoughts?
7 responses so far ↓
1 Kayode // Feb 20, 2008 at 10:49 am
To be sincere, Interswitch is just like your typical Nigerian company (No foresight). How could they not have seen this coming?
While the likes of Paypal continue to increase the security features of their system to reduce fraud, Interswitch has remained the same since its inception. I guess Interswitch took the issues of Fraud lightly despite the nasty reputation Nigeria has in cyberspace.
For now, the temporary remedy will be for Interswitch to promote its Cashcard brand. Cashcard is just a card account that is not attached to any Bank Account; you simply reload at any participating bank, and spend. I got mine from Skye Bank and it works perfectly online.
2 imnakoya // Feb 20, 2008 at 11:09 pm
This is not good! I have been reading up on the Interswitch API and about ready to implement the system in one of my projects. So other options are there for online transactions then?
The best solution to Nigeria business woes is competition. When a better system comes on board, the slackers either sit up or die. Unfortunately, it appears the competitive spirit is either not there or simply frustrated.
3 Blogger Laments State of eCommerce in Nigeria - AfricanLoft // Feb 20, 2008 at 11:20 pm
[...] David Ajao laments the state of e-commerce/Internet banking in Nigeria. His experience with Interswitch, one of the major platforms for online transaction led him to declare e-commerce in Nigeria is “back to the stone age”. Read full text [...]
4 Mike Awoleye // Mar 3, 2008 at 1:12 pm
It is very easy to criticise and bring rubish efforts, but i will like to say that there is no perfect system. If you read how mastercard, paypal and other payment solutions started and the problem they are facing even up till now, you will agree with me that we only need to encourage interswitch and others to tighten any loophole that our people may take advantage of. Kudos to interswitch, i have enjoyed this facilities provided by interswitch both locally and abroad without a hitch, at least for almost two years now. I have shop online on local sites and foreign sites with it without stress. Reducing the cost of integration will help Nigerian business to get online in a quick time.
5 mrs Olonade Vivian Oluwafemi // Mar 19, 2008 at 10:59 am
l bought some plots of share with Treasureline at lbadan last yr March bt till 2day they haven’t pay me mysh capital
6 Augusta // Mar 23, 2008 at 10:59 pm
I read your issue on Nigeria atm cards and GTB. What you said about GTB is correct. I applied for GTB master card and loaded money in it but was declined on every website i tried using it to purchase. The issue now is that i can’t withdraw the money through any ATM machine. I also went to GTB branch to see how they can credit my balance back to my dom account and they told me it is impossible to have my $100 credit back. I can’t withdraw and i can’t have my money back.
I also experieced the same thing with Zenith Bank. I got thier web surfer master card and it was declined on every website i tried using it to purchase and when i went back to them, they told me that my $120 that was in it is not refundable.
It is realy frustrating.
7 Bernard // Jun 4, 2008 at 12:43 pm
Hi
This is a very unfortunate situation. With such poor efforts from the financial sector ecommerce will never take off, limiting online entrepreneurship. In South Africa (my home country) the situation is much better, but even here there are barriers to ecommerce (like no proper access to Paypal)
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