CAMA raises serious concerns over unreliable POS and ATM banking services

* The banks are making supernormal profits every year buy they are unable to invest in latest and functioning ATMs

* And provision of better internet facilities including better working call service centers

* Worsened by staff members of the banks, who are generally born rude towards the many poor consumers

By Duncan Mlanjira

Consumers Association of Malawi (CAMA) has advised consumers not to solely rely on point of sale (POS) and automated teller machines (ATM) banking services to avoid humiliation and embarrassment as most times, these platforms don’t function due to poor internet connectivity.

In public statement, CAMA Executive Director, John Kapito accused that “despite the supernormal profits that the banks are making every year, they are unable to invest in latest and functioning ATMs and provision of better internet facilities including better working call service centers”.

Kapito highlighted that “poor digital transactions especially the POS and ATMs have become a humiliation and an embarrassment to consumers as well as traders”.

“Consumers are finding it difficult to transact using digital payments which are facing a lot of challenges due to poor infrastructure such as poor internet connectivity and failure to dispense money.

“Digital payment systems, especially POS and ATMs are meant to improve speed for digital financial transactions and on top of that they are meant to maximise total security protection for both consumers and traders and above all create a cashless digital market and reduce the cost of printing cash paper — which should benefit the consumer, trader, Government and the banks.

“It is, therefore, sad that both the banks and Government are unable to take advantage of this innovative technology to capture the many unbanked consumers.”

Kapito further underscored that what is more frustrating when using POS, ATM’s and other financial payment platforms, “is number of failed transactions and the time and pain the consumer undergoes to have the failed transaction reversed”.

“…It is costly and frustrating moving from one ATM to the other only to find all the ATM’s out of service. This is worsened by the poor customer care at the call centers.

“It is extremely difficult to register a complaint with the banks and expecting to get a quick response especially when the consumer is looking for reversals on failed transactions and this is worsened by staff members of the banks — who are generally born rude towards the many poor consumers who are victims of poor banking services.

“It is one of the worst nightmares to use POS payments as most traders are unwilling to use this technology due factors largely associated with internet connectivity failures and this becomes a huge challenge when a purchase is almost concluded and the network has failed.

“The consumers goes through humiliation as banks cannot reverse the failed transaction and the consumer is unable to access cash to pay for the already purchased goods.”

He added that “this is much worse for those that have travelled long distances and cannot be assisted by way of reversals by the banks”. “Financial inclusion demands huge investment by banks and the Reserve Bank as a regulator needs strong laws to ensure that the banks are complying.”

Thus Kapito concluded by advising consumers is not to rely solely on digital transactions through various platforms, saying “our banks are not ready yet to embrace financial inclusion and its technologies that are seamless”.

In May last year, the Competition & Fair Trading Commission (CFTC) also raised almost the same concerns CAMA has brought forward, that included frequent inaccessibility of e-financial services due to network problems.

CFTC took advantage of last year’s International Trade Fair at Chichiri in Blantyre, where it also had a pavilion, by inviting the financial sector — commercial banks, insurance companies, mobile money service providers and micro finance institutions — to a business session as the Commission’s soft compliance enforcement through advocacy to nip in the bud unfair trade practices.

Only a few pitched up; notably Britam Insurance, NICO, NBS Bank, FDH, Reunion Insurance, FINCA and non from the mobile money service providers but CFTC Executive Director, Lloyds Vincent Nkhoma went ahead to alert all financial service providers of complaints being received from consumers that included poor access to ATMs and electronic payments services.

He highlighted that consumers were also complaining of being charged for failed transactions where cash is not dispensed on other banks’ ATMs and that inter-bank ATM withdrawal fee is usually not refunded.

There is also delayed reversals on failed transactions or mistaken transactions that can take up to five days for commercial banks  and two days for mobile money — and sometimes no refunds for failed transactions on inter-bank ATM withdrawals.

Other concerns Nkhoma raised included management of dormant customers’ accounts in which there was continued charges on dormant accounts without any cut-off point where the customer was not paying premiums.

He also alerted the business guests and the media that pitched up of suspected collusive conduct, through uniform pricing of interest rates; deposit rates, lending rates and interest rate spread, saying it appeared there are some tacit collusion.

He also highlighted financial scams/fraud; dubious Sim-swaps and account hacking; customers’ money fraudulently transferred from bank accounts; and weak security parameters for electronic funds transfers platforms.

Also being complained of was non-disclosure of material information especially when marketing loan packages where the terms & conditions are indicated that they shall apply but are usually in very unreadable small print fonts.

High interest rates on loans was also raised, where there are gaps in huge interest for commercial banks while micro-finance institutions’ interest rates are also high and charged monthly.

Some of the promotions the financial services flighted were reported to be misleading and deceptive advertising and that offer prizes with no intention of supplying them and that prizes may not be awarded in a transparent manner.

They are also weak and ineffective complaints handling mechanisms that include failure to timely and effectively redress complaints.

Thus Nkhoma — while emphasizing that their mandate include soft enforcement through advocacy like the business session with the financial service sector as well as through public awareness — warned that the consequences of failing to comply with Competition and Consumer Protection Law are serious.