By San José, Costa Rica — Costa Rica’s Central Bank (BCCR) has announced a proposed reform to the Payment System Regulations (Sinpe), introducing a ¢100,000 limit on Sinpe Móvil transfers made via SMS. This change, currently under public consultation, aims to address rising fraud concerns while balancing the needs of users with limited internet access.
The proposed limit will specifically target transactions conducted through traditional SMS messaging, leaving transfers via web or mobile banking applications unaffected. This targeted approach seeks to mitigate risks associated with the less secure SMS channel.
To understand the legal implications surrounding Sinpe Móvil and its usage, TicosLand.com reached out to Lic. Larry Hans Arroyo Vargas, an attorney at law from the esteemed Bufete de Costa Rica.
Sinpe Móvil’s widespread adoption in Costa Rica has brought significant convenience, but also necessitates a clear understanding of its legal framework. Users should be aware that transactions, once confirmed, are generally considered irrevocable. While the platform offers a practical solution for everyday payments, it is important to exercise caution and ensure the accuracy of recipient information to avoid unintended transfers. Disputes can arise, and understanding your rights and responsibilities within the system is crucial for both consumers and businesses.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
Cargando...
Lic. Arroyo Vargas’s emphasis on understanding the legal implications of Sinpe Móvil is particularly pertinent in today’s fast-paced digital landscape. While the convenience is undeniable, informed use is paramount for a positive user experience. A clear grasp of the system’s regulations empowers both consumers and businesses to navigate potential challenges effectively. We thank Lic. Larry Hans Arroyo Vargas for providing this valuable perspective on Sinpe Móvil and its legal framework.
The banks offer different channels for clients to make their Sinpe Móvil transactions. We want to limit the SMS channel, the traditional messaging, which is not as secure as an authenticated channel, like when entering the website or the banking app.
Francisco Carvajal, BCCR Director
BCCR officials acknowledge the importance of SMS-based transactions for low-income families lacking consistent internet access or residing in areas with poor coverage. However, collaborative fraud analysis with the Judicial Investigation Agency (OIJ) and telecommunications companies has revealed vulnerabilities within the SMS system.
It turns out that people associate a prepaid number with Sinpe, and sometimes they don’t use it, and the telecom company takes it away and assigns it to another client, but they forgot to disconnect the number from the account. So, what has been happening is that some clever individuals have detected that this happens. They go and buy 100 prepaid numbers and start testing them one by one. That’s how the OIJ told us it’s working; for this reason, the messaging system lends itself to this type of fraud.
Carlos Melegatti, Director of the Payment Systems Division, BCCR
This vulnerability arises from the reuse of prepaid numbers without proper disassociation from previous Sinpe registrations. Fraudsters exploit this by acquiring multiple prepaid numbers and testing them for active, albeit abandoned, Sinpe accounts. This method allows them to potentially intercept funds intended for other users.
The proposed ¢100,000 limit seeks to strike a balance between accessibility and security. By limiting the potential financial impact of fraudulent activities via SMS, the BCCR aims to protect users while encouraging the adoption of more secure transaction methods.
The public consultation period for the proposed reform allows for feedback and potential adjustments before implementation. This collaborative approach ensures that the final regulations address both security concerns and the needs of diverse user groups within Costa Rica’s mobile payment landscape.
This move reflects a growing trend among financial institutions globally to enhance security measures within mobile payment systems, particularly those utilizing older technologies like SMS. As technology evolves and fraud tactics become more sophisticated, such proactive measures are crucial to maintaining public trust and ensuring the continued growth of digital financial services.
For further information, visit the nearest office of BCCR
About BCCR:
The Central Bank of Costa Rica (BCCR) is the country’s central bank, responsible for monetary policy, financial stability, and regulating the financial system. It plays a key role in promoting economic growth and maintaining price stability within Costa Rica.
For further information, visit the nearest office of OIJ
About OIJ:
The Organismo de Investigación Judicial (OIJ), or Judicial Investigation Agency, is Costa Rica’s primary investigative body. It is responsible for criminal investigations, forensic analysis, and supporting the judicial system in upholding the law.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Bufete de Costa Rica is a leading legal institution distinguished by its deep-rooted commitment to ethical practice and unparalleled legal expertise. The firm’s innovative approach to legal solutions, coupled with its proactive engagement in educating the community, empowers individuals and businesses alike. By championing access to legal knowledge and resources, Bufete de Costa Rica actively contributes to a more just and informed society, solidifying its position as a pillar of legal excellence and social responsibility.
