How to avoid credit and debit card-based frauds at bank ATMs

Even though we are moving towards a digital economy, bank ATM transactions remain popular among a large population in India. Bank ATMs allow customers to meet immediate demand for cash, especially in semi-urban and rural areas. The demand is expected to remain the same in the coming days. "Digital payments in India are growing at a rate of over 30% every quarter and is increasingly becoming a less-cash economy. However, given the demographics of our vast sub-continent, cash will be the primary payment mode for small to medium-size transactions for household purchases. So, while Banks invest in digital payment infrastructure around UPI, IMPS and Cards for eCommerce and P2P payments, ATM will continue to service the demand for cash," explains Rajesh Mirjankar, Managing Director & CEO of Infrasoft Technologies.

As useful as ATM transactions are, just like any other mode of payment, they are vulnerable to frauds as well. There are a number of cases that have come to light over the last few years where fraudsters have used bank ATM machines to get credit and debit card details of customers to loot their money.

What frauds can be pulled off at bank ATMs?

"Card-based transactions at bank ATMs are vulnerable to frauds such as card cloning/skimming, SMS tapping, ghost ATMs and as recently found the cyber-attacks to penetrate bank’s network and load trojans that emulate a switch to approve transactions without effecting client account balances in the CBS," Mirjankar explained.

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How to avoid card-based bank ATM frauds?

He said that the customers should be made aware of how to protect their cards and PINs and Banks need to invest in securing their networks. He added that it is possible to have a convergence of ATM infrastructure and mobile handsets to approve transactions using m-Cards, QR Codes and Biometric authorization for card-less ATM transactions.

"Additionally, banks should also focus on the implementation of Fraud management solutions, which proactively reduce such instances by red-flagging the fraud-prone machines, specific cards that have suspicious activities (unusual locations etc.) and carry out root cause analysis of frauds. These steps will incrementally reduce and avoid the frauds at ATMs. Advanced video surveillance and analysis using AI-based systems can potentially also identify suspicious activity at ATMs and suspend cash dispensing," he said.