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12 February 2008
The bank is rolling out 20 000 chip-encoded cards a month to improve security.
Standard Bank, the first major bank in South Africa to embark on the widespread rollout of security-enhanced, chip-encoded credit cards (Chip and PIN cards) to its customers, is currently issuing around 20 000 Chip and PIN cards a month as part of an ongoing exercise to match international standards and sharply improve card security. More than 180 000 customers have already been issued with Chip and PIN cards by the bank, which intends to increase the roll-out volume to over 100 000 cards a month later in the year.
Card skimming usually takes place through fraudsters capturing data by using the same sort of devices that are used for legitimate point of sale or ATM transactions. Automated and high-tech methods being used by fraudsters include pin pad overlays, hardware that attaches inside point of sale terminals and key stroke loggers. Standard Bank's security department recently discovered one of these skimming devices attached to one of its ATMs.
Leon Barnard, Director: Secured Lending and Credit Card at Standard Bank says: "While skimming has been around for some time, banks have taken the initiative to combat this type of fraud. All of South Africa's major banks are adopting Chip and PIN card technology. Chip and PIN cards form the foundation of a new, convenient and secure card banking platform. Consumers are still urged to remain vigilant and adopt secure transaction practices when either swiping or drawing from an ATM. At issue though is the varying rate at which this functionality is being rolled out between the major banks."
Chip and PIN cards are much safer than magnetic stripe cards as they require the keying in of a PIN number before a transaction can take place. The new cards have a chip, together with the normal magnetic stripe, providing an extra layer of security for the bank, card holders and merchants. In many cases cardholders will not only be required to key a PIN, but may also have to provide a signature before a transaction can be successfully processed.
Unlike cards that only have a magnetic stripe, Chip and PIN cards are very difficult to clone, sharply reducing the ability of criminals to copy cards and transact fraudulently on them. It is practically impossible to copy a Chip Card.
Significantly, Standard Bank's rollout of chip-encoded cards, which are governed by internationally recognised Europay, MasterCard and Visa (EMV) standards, lays the platform for the eventual introduction of multi-application "smart cards" at some time in the future.
”At a functional level there is no difference for cardholders or merchants except for the fact that PIN numbers must be keyed into card-readers and that the Chip Card must remain in the point of sale device for the duration of the transaction," said Barnard. For customers, the major benefits are additional security and speedier transaction times. For merchants and the bank, the major benefits are enhanced security and more control over transactions.”
Chip-encoded credit cards will usher in multi-application smart cardsÕ
Looking ahead, while Standard Bank Chip and PIN credit cards are currently only equipped for single applications, the advent of multi-application cards is not too far away.
”In a multi-application scenario, various debit, credit and other cards and products will be able to be incorporated into one card. This will reduce the number of cards people carry in their wallets or purses and also expand the opportunities for a wide range of e-commerce transactions to be conducted from a single card,” says Barnard.
Importantly, Chip and PIN cards carry no more personal information about card-holders on them than existing magnetic stripe cards, allaying fears in some quarters that chip technology will make unwelcome inroads into individual privacy.
”The overall intention of the launch of Chip and PIN cards is to increase and improve security and not to change or interfere with the way people carry out their purchases or other card-based transactions,” said Barnard.
Meanwhile, to counter fraudsters, some banks have equipped ATMs with advanced security features such as ’jitter” technology to disrupt skimming devices. They are also automatically monitoring and inspecting ATMs for evidence of tampering. Maintaining accurate video footage is also being implemented by many financial institutions.
”Sound protection against card fraudsters is only possible if everyone is security conscious - this includes consumers, merchants and card issuers,” stresses Barnard, emphasizing that Standard Bank is constantly reviewing its encryption technology and adopting proactive measures to counter card-based fraud.
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