RETRACT OPTION IN ATM IN NIGERIA AND ASSOCIATED RISK

RETRACT OPTION IN ATM IN NIGERIA AND ASSOCIATED RISK
It is common knowledge that there are different brand of ATMs in operation in the Nigeria Market as at today. They include NCR, TRITON, Wincor etc. All the Banks in the country including the independent deployers are servicing the Nigeria market from these ranges of ATMs from Europe, America and Asia.
The availability of these ATMs around us has made cash withdrawal easier and simpler for the customers of the banks who hitherto queue up in the banking halls of Banks with their tally numbers waiting for their turn to withdraw Cash. They also made withdrawal of cash possible at odd hours of the day when banking halls are closed to business. ATM also encouraged the Cardholders to carry less of cash thereby running away from all sort of attacks from criminals. It increases the speed of transaction and also saves time.
ATM also came with its own issues to the cardholders and the bank which included, ATM not releasing cash to the cardholders after debiting the account of the customer, releasing less than what the cardholder requested and debiting the customer for the full amount (partial dispense), outright denial of service even at pressing times, outright fraud using the ATM, incessant Cash jam, frustrated customers from the listed issues, retraction of cash etc.
Beyond all the issues listed, we want to talk about the RETRACTION of cash by the ATM after the customer has failed to pick up the cash after the set period. This is a functionality that was build into the ATM by the developers to help the cardholder in situations he/she could not pick up the cash after the set period such that the ATM sucks back the cash and logs it in the journal which will be used by the bank or issuer to reverse the fund back to the customer’s account. This functionality operates almost the way in all the brand of ATMs in the Nigeria as at today.
It is common knowledge that while the ATM is dispensing Cash to the cardholder, it has the capability of counting and giving the cash analysis on the ATM journal for the purpose of dispute resolution and cash reconciliation. It is worthy of note too, that when the ATM is retracting cash, it has no such capability of counting and logging in the cash analysis of the amount sucked back, even when it bundle rejects or retracts the story is the same. The only information given on the journal as at today is that the cash was retracted.
In the light of the above, it is very possible for a fraudulent Cardholder, to request for N20,000 and when the machine presents the N20,000, he/she pick N10,000 (or any other amount but not the full amount) carefully and allow the machine to retract the balance after the set period. The same customer can log the complaint for the total reimbursement of the N20,000 which we know most Nigerian banks will pay hinging their approval on the journal position which will simply read ‘cash retracted’. Even when the bank does not want to pay, on the face of it, the customer’s position appears very superior and he/she can win it if he/she takes up to any regulator for adjudication.
Even when the bank or deployers reconciles the ATM cash (say on daily basis), the difference will be thrown out but how can the bank or deployer pin it down to the customer in question considering the traffic that hits the ATM in a day and the number of genuine reversals that would have taken place in the same ATM. Compounding the issues is also the fact that both the retracted and rejected cash are dropped in the same cassette even though there is a separation in the cassette.
We feel strongly that this is a major concern the ATM developers must look into considering the Nigeria business environment. We can now appreciate why some banks in Nigeria decided to disable the retract option of their ATMs to run away from the associated risk of this functionality.

OUR RECOMMENDATION:
The ATM developers should build the ATM in such a manner that it should have the capability of counting and logging in the cash analysis on the journal the way it does when it is dispensing cash.