Kenya’s Family Bank has become the latest to join Paynet Group’s PesaPoint network, giving customers access to the network’s nearly 700 ATMs and 1,200 point of sales (POS) and allowing for safer transactions through EMV chip cards.
The bank has signed five contracts with the regional card processor and payments services leader.
The deal allows Family Bank to benefit from Paynet’s Visa EMV Chip card issuing services and availability of M-PESA, Visa, China Union Pay and MasterCard acquisition on Family Bank ATMs.
Family Bank’s chief executive Peter Munyiri hailed the partnership, saying the platforms would enable Family Bank to issue debit and credit cards.
Paynet Group, which already provides payment services to close to 30 financial institutions in Kenya, including KCB, DTB, CfC Stanbic and NIC, in a statement urged East African banks running financial electronic card services to followinternational card companies such as MasterCard, Europay and VISA by migrating to EMV chips.
Paynet Group’s chief executive Bernard Matthewman said the traditional card system of magnetic strips is fading, as it is more prone to fraud compared to the EMV chip card.
EMV chip cards feature higher levels of customer security as all transactions are PIN authorised, compared to the counterfeit Magnetic Stripe cards characterised by a black stripe at the back.
“Magnetic stripe cards can be susceptible to fraud through skimming, where a card is swiped through a magnetic stripe reader to record the information needed to use the card for payment,” Matthewman said.
“The stolen data can then be written to another magnetic stripe card, effectively creating a duplicate that can be swiped to make a fraudulent purchase at an unsuspecting merchant.”
According to the Central Bank of Kenya (CBK), cashless payments, specifically through debit cards, rose to around KSh390 billion (approx US$45.6 million) from KSh211 billion (US$24 million) between January and June this year, while mobile money transfers recorded 41 percent growth, from KSh514 billion (US$606 million) to KSh726 billion (US$856 billion) in the same period.
Debit cards released rose by 15 percent to nearly 8.1 million from 7 million, attributed to the massive adoption of technology by Kenya’s commercial banks, enabling customers to carry out auto-cash deposit services.
According to CBK, customers across different banks are embracing electronic financial transaction services, which have however increased fraud cases. The Ministry of Information and Communications has already tabled the Data Protection Bill 2012 to reinforce data security measures the banks hope would counter the fears.