Page 14 - EngineerIt May 2021

ICT

SA can prevent payment fraud crippling

businesses and local municipalities

Ryan Mer, managing director of eftsure Africa, a Know Your Payee™ (KYP) platform provider,
says technology can be a powerful tool against the fraud and corruption plunging South Africa’s
municipalities and businesses into financial crisis.

ccording to a recent report in News 24, a former OR Tambo District Municipality
project accountant who defrauded the municipality out of R9.8 million, was recently
Asentenced to 15 years in jail. She was the authorised officer responsible for
processing claims from service providers and effecting payments to their bank accounts.
Money was transferred to companies belonging to her former boyfriend and sister, even
though no services were rendered by said businesses.
At a broad level, rampant fraud and corruption signify a financial crisis for the country’s
local and municipal government. National Treasury has described the problem as ‘a serious
financial risk’, while South Africa’s auditor general put the losses to fraud in the 2018/2019
financial year at a staggering R32 billion.

Human element a common thread
A common thread in cases of fraud is the human element, which very often involves irregular
payments to bad actors posing as service providers. By strengthening payment protocols,
municipalities, and indeed any business vulnerable to fraud, can make it much harder Ryan Mer
for nefarious individuals to interfere with supplier data, verification processes and other
payment details. the global Cyber Exposure Index ranks SA
Talking to EngineerIT, Ryan Mer said “I’m a chartered accountant by profession and sixth on its list of most-targeted countries for
very familiar with finance functions in a business world, as well as the internal controls that cyberattacks, with the highest concentration
should be in place. I had a previous tech business that was a technology platform linking the of exposed businesses.
audit industry to the banking industry, in order to manage and transfer information between The KYP solution was developed and
auditors and banks in a more efficient and secure manner, to mitigate the risk of fraud for found significant traction in the Australian
audit purposes. market. “We recognised the need for this in
After selling the business to AdaptIT, my co-founders and I realised that a similar the African environment and licensed the
concept could be applicable to the secure transfer and verification of payment information technology for application in South Africa.
between businesses, which led to the launch of eftsure Africa”. “Engagement with Australia started in
In a very paper-based environment, the transfer of information is susceptible to 2018 but things actually got underway in
manipulation. People can intercept it and change details. 2019. We also realised when we brought
it to South Africa that we had to localise
Data management and integrity platform the solution. We took some time assessing
eftsure Africa is not a payment provider nor a payment gateway, but rather a data the market, talking to potential customers
management and integrity platform. “We are assisting businesses to improve their financial and then spending a number of months
controls by providing organisations with the ability to digitise and automate the verification of localising it. I think at the end of day, we’ve
payees and eft payment data, on a continuous basis through KYP technology. actually produced an awesome solution”.
The technology protects organisations against fraud and error made through incorrect, While the financial fraud figures are
fraudulently changed, or maliciously altered payee information and should be used to ensure almost unfathomable, the grim reality is
that businesses and municipalities beat corruption so that they can thrive – for the benefit that the poorest and most vulnerable in our
of all South Africans. society are affected most by the misuse
of public funds. It prevents basic services
Fraud happening so easily in communities and renders the provision
Another News 24 report details how nine people, who allegedly defrauded the City of of new infrastructure nearly impossible.
Tshwane out of R53m in December 2019 when the city’s servers were allegedly hacked, Successful municipalities are essential for
were finally arrested by the Hawks in March 2021. the country’s success, which is why every
Cases like these have become all too common, an indication of the troubling severity of tool at our disposal should be used to
the problem. Last year City Press reported that in 2020 alone more than 100 people, many of address the problem.
whom were in the employ of provincial and municipal government at the time, were arrested eftsure Africa may just provide the
for their involvement in various fraud and corruption scandals. Worryingly for the private sector, right tool! n

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