Despite the deluge of media reports of robbery attacks on operators of Point of Sale (PoS) terminals across the country, leading to loss of lives and hundreds of millions of naira, operators in the nation’s insurance industry are yet to come up with special insurance products to insulate these operators against such attacks, LEADERSHIP can report.
Agency banking involves using Point of Sale (PoS) terminals introduced by the Central Bank of Nigeria (CBN) to facilitate the policy of cashless economy.
Agency bankers receive and give out cash to customers using the PoS. They are licensed by commercial banks to penetrate remote areas and capture the unbanked. The process is also aimed at reducing the crowds in banking halls and at Automated Teller Machines (ATMs).
The media is awash with reports of attacks on PoS operators by armed robbers who usually dispossess them of the PoS machine and cash. In some cases, the robbers pose as customers only to dispossess the PoS operators of their daily operating cash.
Most of the stolen PoS machines, LEADERSHIP learnt, have found their way into the hands of taxi-armed robbers (popularly called ‘One Chance’) who rob passengers in moving vehicles in the country’s cities.
Such criminals, sometimes after collecting all valuables, equally collect ATM cards of their victims, force them to disclose their PINs and, in the process, withdraw money from their accounts through the stolen PoS machines.
Increasing Attacks On PoS Operators
Ahmed Azeez, a PoS operator in Kuje, a town in the Federal Capital Territory, Abuja, said: “I have heard of several stories of attacks by armed robbers on my colleagues in this town and beyond and we want government to protect this business to encourage more people to join us, so that people can have easy access to cash, no matter how remote their locations are.”
It was learnt that a few days ago, cultists in Onitsha, Anambra State, attacked traders on Regina Caeli Road, targeting Point of Sale (PoS) operators to dispossess them of the cash that they carry.
Recalling the event, an eyewitness at the scene, who gave her name simply as Mrs Uche, told newsmen that “this early morning, they just attacked us and before we knew it, they had dispossessed my neighbour of her money, before escaping in their tricycle.
“It is not the first time. On Monday, too, they attacked a PoS shop at UNIZIK Junction and also made away with cash.”
Further investigation showed that the attacks have been rampant since last year after the PoS business witnessed a boom on the back of the lockdown as more people relied on these cash points for money rather than going to the banking halls.
Johnson Onah, a PoS operator in Lagos who spoke with LEADERSHIP, said before he started, he ensured that he chose a shop located in a secure area at a prominent bus stop with heavy human and vehicular traffic.
“We are safe here because we have lots of people around us here. Also we don’t keep lots of cash, and when we do, it is kept securely where no other person can get to.”
Another PoS operator, Omolola Alade, who operates in a kiosk at another bus stop, told LEADERSHIP that she makes friends with the garage touts who in turn look out for her safety and that of her business.
Others told our correspondent that due to the spate of attacks, they do not keep a lot of cash, and that they open late for business and close early as, according to them, some operators get robbed either early in the morning or late in the evening.
Similarly, two other operators who lamented their ordeal to LEADERSHIP at the weekend said they had lost about N500,000 in recent times to robbers who are now targeting PoS attendants, especially those who receive deposits.
A young lady who works as a PoS attendant at Ifo Local Government Area of Ogun State, Dada Daimot, said she lost about N150,000 to robbers. How she lost the money, she said, surprised her because she kept the money in the kiosk and was about to put up the company’s banner outside the kiosk. By the time she came back, the money was gone.
Apparently, someone must have been following or monitoring her movement and utilised that opportunity of her being away from the money for a few minutes to steal it, she explained.
“I had to repay part of the money to my boss because she was blaming me for being careless. I had to pay him the N50,000 I had initially saved from my salary to him. He bore the remaining cost,” she said.
Similarly, she said, most of the PoS operators around the area have had similar nasty experiences.
Another operator who wants to remain anonymous said he was robbed at gunpoint, and had to surrender the PoS machine and the money he was taking to the bank to the robber.
“Since then, the business has not been easy for me. I had to clear all the debt first,” he said.
Searching for the Right Insurance Coverage
On non-insurance of this business, LEADERSHIP investigation showed that there is no specific insurance product targeted at the agency banking business, although the PoS operators can take the conventional theft or burglary insurance coverage.
However, the challenge with the theft and burglary insurance is that the conditions are difficult for PoS operators to meet, hence the need for insurers to begin to look inward and roll out specific products for this segment of the banking industry.
Speaking in an exclusive interview with LEADERSHIP yesterday, the managing director/chief executive officer, FBNInsurance Limited, Mr. Val Ojumah, said such risk could either be covered by the bankers of the PoS owners or could be bought as personal insurance cover from underwriting firms.
He explained that for an insurance company to insure such risk, certain conditions have to be met.
“There is need for a proper book of records to ascertain the authenticity of such money loss while the PoS operator must also be extra careful, so that the robbery is not traceable to his careless attitude or negligence.
“Similarly, the premium paid is dependent on the business environment and rate of volatility of such an environment, hence, the premium to be paid to insure this money is usually 2 to 3 percent of your operating capital.”
If any PoS operator can meet this requirement, he said, they can approach some insurance firms for such coverage. He gave assurance that the stolen money would be paid as long as it does not violate the terms and conditions of the insurance policy.
According to the managing director/chief executive officer, Universal Insurance Plc, Mr. Ben Ujoatuonu, this risk may be covered under the conventional burglary or theft insurance, but the condition may be difficult for PoS operators to meet.
Noting that the current conventional products do not entirely suit the operation of the players in that micro sector, such as PoS terminal operators, he advised his colleagues to begin to look at this area of business by conducting a research on their operations, their turnover, economic impact, and probability of theft in the business, among other fundamentals.
Answers to those issues, Ujoatuonu said, will inform the nature of products that the industry can channel to PoS terminal operators.
“Agency banking came as a result of the CBN financial inclusion strategy of which insurance companies are a stakeholder. So, it is right for insurers to begin to look at the operation of these agents and find a way of designing products along their line of operations. By that, insurers, too, would have contributed to the financial inclusion goal,” he said.
Ujoatuonu urged PoS agents to approach insurance companies to discuss business threats so that underwriters can kick-start the process of product development along this area of business.