Shopping online has become one of the most popular ways people choose to use to buy, well, anything they want. The popularity of this form of making purchases has lead to the increase of payment options available. Some of them are not as safe as they seem.
One of the payment options starting to be seen more frequently on online shopping platforms is ‘instant EFT’. But according to the South African Reserve Bank (SARB), this form of payment is not really instant. Also, there are risks to it most shoppers aren’t aware of. SARB issued a directive on 15 November 2024, restricting all electronic funds transfer (EFT) credit payment instructions in the country. Here’s all you need to know.
ALL YOU NEED TO KNOW ABOUT THE RISKS OF ‘INSTANT EFT’
BusinessTech reported about the new directive on 16 November 2024 and the warning of the risk these electronic funds transfers pose to on online shoppers. The aim of the directive is to prevent consumers from becoming victims of fraud. It’s also to protect the National Payment System (NPS).
The new directive is in accordance with section 12 of the National Payment System Act No. 78 of 1998 (“NPS Act“), as reported by Polity on 19 November 2024. It states that issuing an EFT credit payment instruction on a payer’s behalf on the NPS is forbidden. This is unless the one issuing it is registered with the SARB and has received informed consent from the payer before issuing the instruction. A large majority of online consumers are not aware that they are unknowingly giving consent for these instructions to be issued.
WHAT IS SCREEN SCRAPPING AND HOW DOES IT AFFECT YOU?
The use of EFTs greatly increases the risk of online shoppers becoming victims of screen scraping. SARB defines screen scraping as a tool ‘used by a person, usually a fintech company, in partnership with beneficiaries, to conduct screen scraping to issue electronic funds transfer credit payment instructions.
‘Screen scraping is largely conducted without the informed consent of the payer, the understanding of the implications of sharing the credentials as well as using the branding of clearing system participants without approval.’
SCREEN SCRAPING RISKS
SARB provided six main risks screen scraping poses, which you should know ahead of the Black Friday shopping frenzy. They include:
- The lack of informed consent and complete understanding of the implications of sharing the payer’s credentials.
- Use of ‘instant’ when referring to the payment, which is misleading.
- Conducting sort-at-source. This is ‘using bank accounts from multiple banks to ensure that payments are on-us transactions, resulting in an ‘instant’ payment.’
- Lack of data privacy as the payers’ online banking credentials are at risk of being compromised.
- Fraud exposure as individuals can pose as those issue EFT credit payment instructions on the payer’s behalf.
- Risk of non-delivery of goods or services purchased, or financial loss.
DO YOU CHOOSE THE INSTANT EFT PAYMENT OPTION WHEN SHOPPING ONLINE?
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