Understanding the Risks of Instant EFT: What South African Shoppers Should Know
Online shopping has gained immense popularity, leading to a wider array of payment options. However, not all of them are as secure as they appear.
One common payment method is ‘instant EFT’. The South African Reserve Bank (SARB) has highlighted that this type of payment isn’t truly instant. Moreover, there are risks associated with it that many shoppers might not recognize. On 15 November 2024, SARB issued a directive that restricts all electronic funds transfer (EFT) credit payment instructions in South Africa. Here’s what you need to understand.
UNDERSTANDING THE RISKS OF ‘INSTANT EFT’
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As reported by BusinessTech, the aim of the new directive is to protect consumers from fraud and to safeguard the National Payment System (NPS).
The directive aligns with section 12 of the National Payment System Act No. 78 of 1998 (“NPS Act“). It prohibits issuing an EFT credit payment instruction on behalf of a payer without registration with SARB and without informed consent from the payer. Many online consumers are unaware that they often give consent without realizing it.
SCREEN SCRAPING AND ITS IMPACT
Using EFTs increases the risk of online shoppers encountering screen scraping. SARB defines screen scraping as a method used by some fintech companies to issue electronic funds transfer credit payment instructions, often without the payer’s informed consent.
UNDERSTANDING SCREEN SCRAPING RISKS
SARB has identified six key risks associated with screen scraping that consumers should be aware of, especially during busy shopping events like Black Friday. These risks include:
- Lack of informed consent and understanding of sharing credentials.
- The misleading use of the term ‘instant’ regarding payment.
- Using multiple bank accounts for ‘instant’ payments through sort-at-source methods.
- Compromised data privacy from sharing online banking credentials.
- Fraud risks from impersonators issuing EFT instructions.
- Potential non-delivery of purchased goods or services, leading to financial loss.