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Brazilian kidnappers take advantage of new PIX payments system

Brazil's central bank has imposed spending limits on its new PIX instant payments platform in the face of a sharp increase in "lightning kidnappings".

  8 3 comments

Brazilian kidnappers take advantage of new PIX payments system

Editorial

This content has been selected, created and edited by the Finextra editorial team based upon its relevance and interest to our community.

São Paulo has seen a 40% rise in lightning kidnappings - where people are grabbed on the street and forced to transfer money in exchange for their release - in the first six months of the year.

The increase has been attributed by police to PIX, which launched late last year to let citizens make instant payments 24/7/365 through mobile phones, online banking and ATMs.

“These lightning kidnappings were kind of dormant. But since PIX entered the market in November last year, we have noticed a significant increase in cases,” Tarsio Severo, from the department of special police operations in São Paulo told local media.

In response, the central bank has put a $200 transfer limit on P2P payments between 8pm and 6am, when most attacks occur. In addition, there is now minimum waiting time for increasing transfer limits and people can choose to set their own different limits for day and night, according to the Financial Times.

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Comments: (3)

A Finextra member 

This type of fraud can be prevented using the NoPass passwordless authentication platform that can require a second party on the bank account to approve the first party's transaction. This feature is call Two Party Integrity. NoPass requires account holders to perform a biometric step on their smartphone to authenticate. This eliminates any doubt who is logging in and who is executing the transaction. This is a silver bullet for bank fraud

Rocky Stefano

Rocky Stefano CEO at Identita Inc.

To Jim above... So I grab someone on the street...tell them to give me $500 or I'll cut their throat. But wait...my account is protected by "Two Party Integrity. NoPass!!" Hurray. So two things happen. 1. The person ends up on the floor with their throat cut or 2. The person is forced to call THE SECOND PERSON, likely a spouse, partner or friend who is then going to release the funds rather than listen to me gurgling in my own blood. Your system doesn't do anything in this situation except exacerbate the situation.

Hitesh Thakkar

Hitesh Thakkar Technology Evangelist (Financial Technology) at SME - Fintech startups (APAC and Africa)

If you put yourself in place of the guy who gets kidnapped , it's like guy has put gun on your head and asked for money

Controls such as delaying the new set limits for day and night and seperate limits minimise he risks even if you are caught.

If you want to make it more impactful then you can ask customers which suffered the fraud to log complain with details of P2P transaction so that, police can trace the offender - ofcourse it calls for stronger KYC norms in Brazil's banking system.

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