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Why CBN Set Limit For USSD Transactions On Mobile Devices
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USSD transactionsWhy CBN Set Limit For USSD Transaction On Mobile Devices

From 1 June, the maximum everyday transactions for mobile Unstructured Supplementary Service Data (USSD) in Nigeria will become N100,000 ($276).

USSD works with GSM network that helps it communicate with a service provider’s platform is considered cost-effective, more user-friendly, faster in concluding transactions, and handset agnostic. It is a session-based, real-time messaging communication technology, which is accessed through a string, which normally starts with an asterisk (*) and ends with a hash (#).

This policy was concluded yesterday when Central Bank of Nigeria (CBN) declared concerns over the imaginable vulnerabilities and growing threats of the USSD technology. Because of the absence of set rules set on mobile phone USSD transactions, numerous customers who utilize the service have been exposed to numerous risks hence the N100,000 day by day maximum peg. “Vast applications of the USSD technology, regarding available services, have raised the issue of the risks inherent in the channel,” said Dipo Fatokun, CBN Director, Banking & Payments System Department. And a shift in policy was in furtherance of CBN’s mandate to develop and enhance the security of the electronic payment system.

While installing rules that enhance the security of the electronic payment system, there is a provision to the policy as said in the round Fatokun sent to switches, Mobile Money Operators (MMOs), Payment Solution Service Providers and Microfinance banks. The round noticed that in spite of the fact that the N100,000 limit per customer per day for transactions applies, customers desirous of higher limits might execute documented indemnities with their banks or MMOs.

From the commencement of the USSD technology in Nigeria, distinctive maximum limits running from N100,000 to N500,000-contingent upon customers’ risk absorption levels have been set by commercial banks and as a result of this lack of coordination, numerous customers have lost billions to fraudsters.

With the new policy, the CBN has mandated that all transactions above N200,000 ($552) must experience an effective second-calculate authentication expansion to the Personal Identification Number (PIN) being utilized as a first level authenticator. All exchange amounts apply to the PIN authentication.

As per the structure, banks should not send the second-factor authentication to the customer’s enrolled GSM number or device; and it might not be generated or displayed on the USSD menu


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Ayodeji Bankole
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