Need for Banks to protect users of Automated Teller Machine (ATM) card from Fraud.

The old financial method of commerce was without the use of physical cash. Thus, an entire transaction consisted only of exchange of goods popularly called “trade by barter”. As commerce and business transaction became more complex, the use of monetary instruments as a unit of exchange replaced the barter system and money in various denominations was used as the sole purchasing power. However, as the volume of commerce and business transaction increased, huge monetary sums were required for some form of transactions which made paper and metal based currency become more cumbersome and it heralded the use of “plastic money” in the form of credit cards, debit cards. Apparently, this has resulted in the increasing use of Automated Teller Machine (ATM) all over the world. The use of ATM is not only safe but is also convenient. This safety and convenience, unfortunately, has an evil side as well that do not originate from the use of plastic money but rather by the misuse of the same. Over the years, consumers have come to depend on and trust the Automatic Teller Machine (ATM) to conveniently meet their banking needs. But in recent time there have been a proliferation of ATM frauds in the country even and across the globe. Managing the risk associated with ATM fraud as well as diminishing its impact is an important issue that face financial institutions as fraud techniques have become more advanced with increased occurrences. The ATM is only one of many Electronic Funds Transfer (EFT) devices that are vulnerable to fraud attacks. This evil side is reflected in the form of “ATM frauds” that is a global problem. The use of plastic money is increasing day by day for payment of shopping bills, electricity bills, school fees, phone bills, insurance premium, traveling bills and even petrol bills. The convenience and safety that credit cards carry with its use has been instrumental in increasing both credit card volumes and usage. The world at large is struggling to increase the convenience and safety on the one hand and to reduce its misuse on the other. An effective remedy for prevention of ATM frauds, however, cannot be provided unless we understand the true nature of the problem. ATM fraud is not the sole problem of banks alone. It is a big threat and it requires a coordinated and cooperative action on the part of the bank, customers and the law enforcement machinery. The ATM frauds not only cause financial loss to banks but they also undermine customers' confidence in the use of ATMs. This would deter a greater use of ATM for monetary transactions.

Continue ReadingNeed for Banks to protect users of Automated Teller Machine (ATM) card from Fraud.