Important announcement for South Africans with credit and debit cards

South Africans will soon be unable to use their banking cards at toll gates as banks and toll concessionaires move to combat the growing threat of card fraud.

The widespread issue of card cloning has prompted a shift in payment methods, with the aim of improving security and protecting motorists from financial losses.

Nedbank recently announced that people won’t be able to swipe their debit cards at tollgates starting 20 January 2025.

This decision follows an alarming rise in debit card fraud at toll plazas.

While customers can still use credit cards, garage cards, cash, or electronic tags for payment, the changes reflect an urgent industry-wide effort to address vulnerabilities.

Nedbank’s actions align with broader measures being adopted across the country.

The banking and toll industries are introducing contactless payment systems as a safer alternative to traditional magnetic stripe (magstripe) card swipes.

FNB, in partnership with Visa, has already begun rolling out contactless payment technology at select tollgates ahead of the festive season.

This initiative comes as the industry regulator enforces a phased transition away from magstripe cards.

Starting 1 December 2024, magstripe payments will be gradually replaced with contactless methods, a move supported by Trans African Concessions (Trac) and the South African National Roads Agency (SANRAL).

According to Trac, swipe payments will no longer be accepted at N4 tollgates, and motorists will need to rely on contactless cards, smart devices, Trac tags, or cash.

SANRAL and other toll concessionaires will continue accepting magstripe payments until 31 May 2025, and fleet and garage magstripe cards will be allowed until June 2026.

The shift is driven by escalating incidents of card skimming and cloning at tollgates.

Fraudsters capture card information using various techniques, including overlay skimmers, internal skimmers, and wireless devices.

These devices are often paired with fake card readers or hidden cameras to steal PINs, enabling criminals to make unauthorised transactions.

Toll plazas have become easy targets for these crimes because they process lots of small payments, which can go unnoticed at first.

A recent case highlights the extent of the problem.

An FNB customer reported unauthorised charges amounting to R5,000 at the Machadadorp and Middleburg toll plazas, despite having cancelled the affected card.

This underscores the ease with which fraudsters can exploit magstripe cards, prompting banks and toll operators to accelerate the adoption of more secure systems.

SANRAL spokesperson Vusi Mona noted that the traditional practice of handing over cards at toll booths has long been a point of concern.

Contactless payments aim to eliminate this vulnerability by allowing motorists to complete transactions without surrendering their cards.

This aligns with global trends in payment security, offering a more efficient and safer experience for road users.

However, the issue of magstripe fraud is not limited to tollgates.

Experts like Loyiso Boyce, Managing Director of Clyrofor, emphasise that such fraud occurs across various settings, including ATMs and retail stores.

Boyce pointed out that fraudsters often exploit small, frequent transactions, which can accumulate into significant financial losses before victims become aware.

The South African Banking Risk Information Centre (SABRIC) corroborates these concerns, reporting that card fraud remains a pervasive challenge.

Online transactions, in particular, have seen a surge in Card Not Present (CNP) fraud, accounting for 68% of gross fraud losses and marking a 19% increase from the previous year.

While the transition to contactless payments at tollgates addresses one facet of card fraud, the broader issue requires ongoing vigilance and innovation.

For South African motorists, the upcoming changes signal a necessary adjustment to payment habits.

Magstripe cards will soon stop working at these locations, but contactless payments will make things safer and more convenient.