Smartphone banking fraud is a big problem in South Africa. In its crime stats report for 2021, the South African Banking Risk Information Centre (Sabric) said there was a 13% rise in reported fraud incidents on banking apps, which increased from 10 667 cases in 2020, to 12 095 in 2021.

limit bank fraud

It added that almost 42% of digital crimes occur from this segment, and naturally, the rise in banking app fraud is due to the large number of banking app users. Another Sabric stat worth sharing: the average financial loss per incident went from R12 315 in 2020, to R17 775 reported in 2021, which is a rise of 44.%.

Every other day there is a twitter thread or warning about how someone was scammed. I recently saw a new method where you’re approached in a store and told your car has been hit, and the person immediately follows the stranger out to their vehicle, only to be held up at gun point – the car is not even what they’re after. It’s your smartphone, bank card an PIN.

I’ve been thinking about how to minimise banking fraud for months now, some of you may have picked up from my Twitter replies to folks who ask me stuff. Before I get into it, I want to emphasise, like this post title says, this is more about how to limit or minimise bank fraud, not completely keep you safe.

I took my time with this post because as always, I want to be thorough with testing (plus I was traveling) but I believe my tried and tested methods over the last few months could minimise a potentially worse situation. Another thing to keep in mind, I am writing from an iPhone point of view because this is where my verified bankings apps sit. I use both Discovery Bank and FNB.

My tips, in no particular order, to limit banking fraud:

1. Use a virtual card
It can be generated from your banking apps. Honestly, don’t even bother loading your physical card onto your devices. I received a new banking card months ago and haven’t loaded it anywhere because I use virtual cards. It uses a tokenisation method, not your real number; and because it doesn’t physically exist, nobody can steal your credentials to use elsewhere. That changing CVV on FNB is game changer.

2. Leave your physical cards at home
Yes, this sounds a bit futuristic, but if you have your virtual cards loaded onto your smartphone or wearable, why do you need it? Okay, except for large purchases, yes, but for regular stops at the grocery store, which can intentionally be kept to R500 or less, or for meals with friends, you don’t actually need it. And if you really need the cash, send money to yourself as a cashless withdrawal. You won’t be stranded, I promise.

3. Remove banking apps from search and home screen
I’ve done this as an additional step because of the rise in smartphone banking fraud. I think this is a tip that could minimise the situation. Under Settings > Siri and Search, go into banking apps and remove them from appearing in search. So, after removing the banking apps from your home screen, when you pull the search tab down, it looks like you don’t have banking apps on your device. I am fully aware criminals are always one step ahead but worth a shot imo. You can access your apps from your app library.

4. Have two bank accounts
Before you wonder why I would ask you to increase your bank accounts, consider separating your money. You know the saying don’t leave all your eggs in one basket? Yes, that. Get a cheap transactional account if you must, and then another for your savings/investments, etc. The one that holds all of your savings, you should not even carry that card around. The cheaper transactional account should be used based on you topping it up as needed. I currently use two bank accounts and while it initially required time to set-up, it is the best thing I’ve done. The peace of mind is unmatched. I am maintaining both eBucks and Vitality Money, you can read more about my Discovery Bank account test here:

https://www.nafisa.co.za/discovery-bank-purple-test/

5. Use wearables and devices to pay
If you have a smartphone with NFC or a wearable device like a smartwatch or fitness device that supports any form of tap to pay, get on that immediately. This is where you would load your virtual cards too. I’ve been saying it for years and I will keep saying it – digital wallets are safer than physical ones. When your physical wallet gets stolen, your credit card can be swiped immediately (the admin of replacing though); but when your watch gets stolen, they can’t unlock it without your PIN. It doesn’t get more secure than a digital wallet. If you don’t believe, it’s okay boomer, I don’t think I can convince you otherwise.

6. Use Scan to Pay apps
Scan to pay apps like Zapper or Snapscan are extremely useful. Load your bank cards on there and just scan a QR code to pay. Most restaurants have QR codes on the bill for years now (pre-pandemic), and physical stores like supermarkets and pharmacies have them printed at the till points. This is a great option if you have a smartphone does not support NFC, and you don’t own a wearable device. If this is the case, make a note of physical stores within your vicinity that support it and shop there.

7. Switch to a secure mail client (biometric unlocking)
Smartphone snatching and related fraud results in the person who stole your unlocked phone gaining access to your email accounts. It is said this is how some of the fraud occurs by having access to your iCloud etc and resetting passwords. Both Mail and Gmail on iPhone don’t have a passcode lock option. I’ve been testing a mail client called Edison for Android, iOS and Mac (check it out here). It supports Face ID if the device supports the feature. If you don’t unlock twice with your face, you can put your passcode.

8. Hide your bank accounts
I tested this on FNB. I hid all my accounts besides eBucks and my main fusion account but then I couldn’t transfer money to any of the accounts that I had hidden from the landing page. This is a crucial one because we know this is where fraudsters go when they are after your money to clear your accounts. It just involves a lot of admin to add it again once you need to transfer money into your other accounts. It will be constant back and forth of hiding and unhiding. A good way to make it work is to open it up once a month after pay day when you are transferring funds etc, and hide again.

TL;DR – The quickest things you can implement to limit banking fraud is to generate virtual cards; load them on your NFC supported smartphone or wearables; leave your bank cards at home; and hide your accounts on your banking app if supported. If you don’t have a physical card on you, have your accounts hidden, and have a little money available in your cheap transactional account (see point #2), there will be very little to steal from you – even if you’re forced to use the “send money” or use an “ewallet” feature.

I hope at least one these tips are useful to you. If there is anything you do personally and want to recommend, please leave a comment below.

EDIT – Thank you for sharing your experiences with me. One of the top feedback received was to delete the banking app off your smartphone and verify it on a device like an iPad, which you don’t have to carry around with you. This might be the most worry-free way to do it!