Apparently worried by the challenges faced by users of Automated Teller Machines (ATMs) in the country and implications for the payment system and financial inclusion, the Central Bank of Nigeria (CBN), on Sunday published its reviewed Guidelines on Operations of Electronic Payment Channels in the country.
According to the guidelines which become effective on June 8, 2020, reversal or resolution of failed transactions when customers use their cards in the machines of other banks shall be treated within 48 hours, as against between three and five days currently.
Banks and payment service providers are also to ensure instant reversals when their cards are used in their machines, as against the current three days.
The accompanying circular signed by Musa I. Jimoh, the CBN’s Director of Payments System Management Department, dated May 29, 2020, directed that where instant reversal, however, “fails due to technical issues of system glitches, the timeline for manual reversal shall not exceed 24 hours.
“Acquirers shall reconcile and refund all funds in their possession, belonging to customers as a result of ATM’s non-dispense and partial dispense errors; (just as) Acquirers shall also install appropriate mechanism to immediately initiate refunds without the prompting of the issuing bank or the customer,” according to the guidelines.
Also, the CBN requires that refunds on disputed/failed Point of Sales/Web transactions shall no longer be treated in five days as it is today, but 48 hours.
In addition, the guideline requires all switches “to adjust the chargeback cycle in their dispute resolution systems to 24 hours from 72 hours.”
All acquirer-initiated refunds shall henceforth be initiated by all banks within 48 hours, while processors are to provide daily settlement reports latest 8a.m. on a T+1 basis.
The guideline equally requires the Nigerian Inter-Bank Settlement System (NIBSS) to send daily reports on reversals to processors on or before 10 pm daily.
The new guidelines, which supersede the Guidelines on Operations of Electronic Payment Channels in Nigeria (2016), issued by the CBN, requires “all banks are to clear backlog of all ATM customer refunds within one week and within two weeks for POS and Web customer refunds effective June 8, 2020.”
Failure to adhere to the above service level agreements, the circular warned, “will attract appropriate penalties.”
It added that the CBN will continue monitoring developments and issue appropriate directives in its bid to improve quality and efficiency in the country’s payment system.
Specifically, the guidelines require, among others, that “all ATM systems shall have audit trail and logs capabilities, comprehensive enough to facilitate investigations, reconciliation and dispute resolution.”
Access to ATMs should also be controlled and secured so that customers can safely use them.
As part of checking the situation where many bank are perpetually out of use, resulting in one or two machines working out of four or five in one location, the guidelines stipulates that all ATMs “deployed for public use shall have downtime (due to technical fault) of not more than 72 hours consecutively.”
Where this is not practicable, the guidelines continued, “customers shall be duly informed by the deployer,” who must make sure helpdesk contacts are adequately displayed at the ATM terminals.
At the least, such deployer must provide a dedicated telephone line for fault reporting which shall be functional and manned at all times that the ATM is operational.
All ATMs deployed shall have appropriate monitoring mechanism to determine failure to dispense cash, besides an online monitoring mechanism to determine vault cash levels, just as replenishment is carried out as often as necessary to avoid cashout.
The CBN also warned banks against ATMs being stocked with unfit notes and that cash is available in the ATMs at all time, with the funding and operations of the
ATM deployed by non-bank institutions being the sole responsibility of the bank or institutions that entered into agreement with them for cash provisioning.
Acquirers are also to “monitor suspicious transactions and report same to CBN, based on the agreed format and timeframe.”
ATMs are also to be installed with Anti-Skimming devices for ensuring effective mitigation against fraud incidents, even as “the CBN shall conduct onsite checks of ATMs with a view to ensuring compliance with cash and service availability. Also, to ensure effective monitoring, all acquirers shall report the volume and value of transactions on a monthly basis to the CBN’s Director, Banking & Payments System Department.