Remember at the end of October, when BancABC’s Visa prepaid card was down for everyone and for days on end? The failure that blocked all those who used the card at home and abroad? Well, it looks like the authorities found the person behind it. According to a ZimLive report, Malvin Kudakwashe Serima appeared in court yesterday in connection with a US $ 120,000 money laundering scheme.
This suspicious transaction would have been the reason BancABC had to shut down its service for days and it was not only in Zimbabwe but also in other territories.
According to the National Prosecution Authority, Serima opened two Visa accounts which he then deposited $ 10,000 in the first and $ 110,000 in the second. Serima would then have transmitted the identification numbers to two accomplices Talent Kamupupu and Paminous Mutengwa. The two, who are apparently in Ivory Coast, then withdrew US $ 8,400 from the first card and US $ 9,530 from the second from vending machines.
“Both transactions were cash withdrawals from ATMs, a trend synonymous with money laundering,”
Thomas Chanakira, prosecutor (via ZimLive)
This series of transactions was reported by the risk department of BancABC who relayed the situation to Visa and the Reserve Bank of Zimbabwe. BancABC allegedly found 11 cards used for suspicious transactions, all allegedly linked to the same group of its customers.
The remainder of the deposited amount was frozen by Visa International and BancABC Zimbabwe CEO Dr Lance Mambondiani said the following
“We first needed to determine how far the exposure extends, because we have banks in six countries, all of which sit on the same VISA platform. We are quietly satisfied to have identified the weakness of the system and hope that by working with VISA International, we will be able to restore the cash withdrawal service in the coming weeks ”,
Hopefully this won’t be an attack on less stringent KYC requirements for accounts.
How Serima was able to open two Visa Prepaid cards and not raise suspicion on BancABC’s internal systems is very strange. Moreover, how these large deposits were not immediately reported or monitored is also puzzling. Moreover, the chain of events until the two accomplices managed to withdraw the funds more than seven thousand five hundred kilometers away is a mystery which was not revealed in the report.
The prosecutor in the case spoke about the nature of BancABC’s KYC requirements for its prepaid visa.
“Thomas Chanakira, for the prosecution, said Serima had opened two VISA card accounts with the bank which have a lower threshold for know-your-customer rules as they are prepaid.”
The card is a fantastic facility for those wishing to access international services, the fact that the barrier to entry is low is great as it allows more Zimbabweans to participate in international trade.
In addition, ZIMRA already collects VAT and other taxes on transactions made by these cards like Netflix, Spotify, Facebook Ads payments, etc.
The problem, at least in my opinion, is the internal systems at BancABC that Dr Mambondiani admitted and said they would work on. Things like multiple accounts should be pointed out early on and further consideration should be put on that, not necessarily on the low barrier to entry. Conventional Nostro accounts are not completely immune to fraud and other illicit activity, so the solution should be to tighten up the back end, not the way customers can access prepaid USD cards.
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