In a surprising announcement, South African financial bodies the Reserve Bank, and the Financial Sector Conduct Authority, issued a warning this week that consumers should beware of “Instant EFT” payment options on Ecommerce sites, calling them fundamentally unsafe and potentially leaving users open to fraud, and without recourse.
Offered by many major payment gateway providers, the Instant EFT is provided as an alternative to online credit card payment, primarily for people without credit cards, however, while the bodies did not say outright that this method should not be used, they did warn that consumers should be aware of the risks when using this method of payment.
Online Banking Details
Effectively, using an Instant EFT requires suppling your online banking details to the system, which uses them to perform the transfer. However, the user has no control over the use and storage of those details, and because doing so technically constitutes the voluntary supply of online banking details, may actually constitute a breach of your banking terms & conditions with regard to maintaining the security of your access. This could mean forfeiting legal protection in the case of fraud.
EFTs Are Final
Another consideration here is the fact that EFT payments are considered final, and cannot be reversed. Which means if the online store does not deliver your goods, you cannot recover that amount through the bank.
Fake Ecommerce Sites
Finally, fake ecommerce sites could offer instant EFT in order to gain access to your banking details, and may then transact through your online banking platform as though they were you, making payments to their own account, applying for loans, increasing transaction limits etc.
Prefer Standard Card Payments
If at all possible, the regulatory bodies advised consumers to rather make online payments either by credit or debit card, or if necessary, perform a manual EFT rather than giving the payment system access to your online banking in order to effect an instant EFT.