In fact, it is part of our regulatory requirement that any bank that is applying for a product licence of the use of USSD must also have special PIN. You find out that when some of the banks started to use USSD they only adopted a static Personal Identification Number (PIN) which is usually taken from the product. But we noticed that that is prone to fraud. That is because the last four digits that is in front of my card, anyone who wants to do a USSD fraud on my account may need to get the last four digit of my card.
Unfortunately, when you use an ATM and you get a receipt, have you ever noticed that the number that comes with your receipt is the last four digit of your card? So somebody does not even have to target my card. All you need do is monitor me closely.
If I get a receipt from an ATM, you get the number and with that you can carry out unauthorised transactions from my account. So we said no, we cannot use static PIN irrespective of the source of the PIN it must be dynamic and that is one of the challenges or issues when it comes to the regulation of the bank. Because a bank that already set up a system for USSD using a static PIN and we now said no, stop using a static PIN, it must be dynamic.
It means it needs to do a lot of changes. On USSD, we did an investigation recently and discovered a particular fraudster. We worked with Nigeria Communications Commission (NCC) to identify him and we have his pictures and we have all his bank details. What he has been doing is to make transfer not into an account but to use that channel to recharge his phone.
And you know that there are some telcos that offer opportunity for one to sell airtime. So he has such a long list of recharge.
The risk in the use of USSD like any other payment channel is there, but the point is what we are doing to ensure that those risks are eliminated. It is the simplest method of financial inclusion there is no doubt because unlike an application on your smart phone that would need data before you can do any transaction, USSD can work where ever you can make or receive calls.
So if I go to my village and I want to pay someone who has a bank account I can use a USSD.
Very soon we are going to issue a circular on the minimum regulatory requirement on the use of USSD. We have reached an advanced stage on that and that we will be presenting to the board of Governors of the CBN soon.
