Several more retail banks in Qatar have been tightening their rules on the usage of debit cards for online purchases, in response to efforts by the country’s central bank to crack down on fraud.

The unexpected ban on using debit cards for online shopping – and in some cases, the unexplained deactivation and replacement of bank cards – is causing frustration among customers ahead of the holiday gift-giving season.

Commercial Bank of Qatar sent text messages to customers this month informing them that rules set out by the Qatar Central Bank (QCB) prohibit the use of debit cards to make purchases on the internet.

Similarly, the International Bank of Qatar (IBQ) also notified customers this week that they could not use their bank cards to pay bills online, according to one client:

“(I) just spoke to IBQ and they have confirmed that since last Sunday, December 1 you cannot use debit cards to pay for any e-government, Ooredoo or Kahramaa service,” wrote Nathan Delaney on Facebook. “As far as I can tell it’s just online but it’s a big inconvenience.”

That follows a text message sent by the Qatar International Islamic Bank to its customers, alerting them to its new online shopping rules, as well as advising them to change their personal identification number, or PIN, as soon as possible.

Credit cards have not been affected.

Closing the loophole

All this stems from a directive issued by the Qatar Central Bank in November, reminding local financial institutions of an existing ban on the use of debit cards for online purchases. But apart from the brief text messages sent to customers, there doesn’t appear to have been any widespread public announcement or notice of the rules.

That’s left some puzzled about the apparent sudden policy change, even though the restriction had actually been in place for some time.

According to central bank officials, the government restricts the use of debit cards to transactions where the customer must enter a PIN to authorize the purchase.

However, Abdul Hadi Ahen, the acting director of banking, payments and settlements systems department at the Qatar Central Bank, told Doha News last month that some banks were routing transactions through payment processing systems outside Qatar that don’t require PIN authorization – presumably through Visa and Mastercard.

The recent directive, he said, closed this loophole and tightened security. Ahen declined to say how many cases of banking fraud have recently come to his attention.

It’s difficult to accurately estimate the size of the problem because banks generally don’t disclose incidents for fear of damaging their brand. But in recent months, frequently reported cases of bank cards being suddenly deactivated and replaced has some questioning the prevalence of debit card fraud here.

Experts, however, previously told Doha News that apart from the relative wealth of its citizens, Qatar is no more of a target for crooks than other countries.

IBAN

Amid the online shopping restrictions and fraud prevention measures, the country’s banks recently announced some good news for residents who transfer money internationally.

Qatar Central Bank will start applying the International Bank Account Number, or IBAN, to all outward and inward remittances that come from and to Qatar starting Jan. 1, according to the Commercial Bank of Qatar.

IBAN is an international standard for identifying bank accounts. Its introduction should lead to faster and more accurate processing of money transfers.