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Showing posts with label Chip and PIN. Show all posts

Gemalto Chippin' In with Venezuelan Bank Card Leaders

Posted by John B. Frank Friday, January 30, 2009 0 comments

Gemalto teams with Venezuelan bank card market leaders to accelerate EMV migration

Digital security provider Gemalto is teaming up with Corporación Cardtech, Venezuela’s largest supplier of magnetic stripe bank cards, and Newtech Solutions, a consulting and technical support organization that specializes in EMV to help banks in Venezuela move to the new, smart credit card that will better protect their customers from fraud and identity theft. Under the new agreement, banks in Venezuela working with the two companies will have access to expertise, consulting services, smart cards and technology from Gemalto. The partners estimate that eight million cards will be issued in the first year, starting in June 2009. Close to 16 million debit and credit cards are currently in use in Venezuela.

"Venezuelan banks are faced with constantly increasing card fraud, mostly due to illegal copying of magnetic stripe information to create “cloned” credit cards. The problem, that affects all of Latin America, has led to a liability shift which penalizes card issuers and merchants that do not issue or accept EMV cards. This liability change for non-EMV cards becomes effective in Venezuela starting July 2009."

EMV cards, also known as Chip and PIN, include a microprocessor and software with security features that work together with the payment transaction authorization network to prevent card fraud and identity theft. Unlike with magnetic stripe only cards, smart card based transactions cannot be easily cloned, which is a primary source of fraud throughout Latin America.

Editor's Note: While it's true that they can't be cloned and easily used" at a retail location, they certainly can be "easily" cloned and used online. This is because the magstripe is still present on the back of the smart cards and that is what is "lifted" when cloning a card.

That, in large part, is why UK Fraud is 14 times higher overseas, (see related stories below) and why 1 in 4 Brits have experienced credit or debit card fraud. (and why Gemalto wants EMV in the US.) Online Transactions (web based) are currently (and HATM can change that) Card Not Present transactions.

So in order to protect both online shoppers and online retailers, online (PIN) debit should be utilized. HomeATM is the only provider of such a solution which has been deemed both PCI 2.0 compliant, and offers "End to End Encryption" on all of it's PIN Based Transactions.

In addition, HATM is EMV ready and it's personal swiping device transforms Card Not Present transactions into Card Present transactions, adding a layer of security with two factor authentication. (what you have and what you know, the card and the PIN respectively)

HATM's end-to-end encryption protects the consumers PIN throughout the whole transaction, as it is NEVER in the clear.

For more information on how HomeATM's PIN Based Transactions can benefit your organization, visit www.homeatm.net

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U.K. Blames Abroad for Increased Fraud

Posted by John B. Frank Thursday, October 2, 2008 0 comments

Some people say there's a woman to blame, but I know...it's my own damn fault
- Jimmy Buffet

"PIN's Blame Abroad...They're Not Smart...Oui Are"

After 3 years of dismal results from the highly heralded Chip and PIN platform, which embeds circuits (Smart card) onto the card, is this the beginning of a propaganda-laced campaign by APACS aimed at deflecting criticism off their (what might be aptly renamed "Phish and Chip") program?

According to every published article I've read, the common denominator is "It's not their fault...it's the countries that haven't followed their lead and incorporated a Chip and PIN system". So they're waiting for everyone else to "get smart" cards and then it'll be OK. Unfortunately for APACS, the US has absolutely no designs on incorporating that system, thus it looks like APAC'SOL. "Sorry about that chief"...

Here's a collage of information from various UK media outlets spewing their spin on the failed ability of Chip and PIN to reduce fraud.

To see APACS report click here

According to APACS, fraud losses for debit and credit cards increased to £307 million in the UK - compared to £267 million over the same period last year. This is a 13 percent rise.

The total amount lost to the fraudsters reached a record £301.7 million in the first half of the year - more than before chip and pin security was introduced in 2006. £121.2million - or 40 per cent of the total - involved fraud committed on cloned or stolen UK cards using cash machines abroad, a 190 per cent rise in just three years.

The figures were boosted in particular by overseas fraud, which made up 40 percent of the total. Phone, internet and mail order scams were another pressure point, fraud from which rose 18 percent to £162 million.

While card fraud fell from £219.5million in 2005 to £209million in the first half of 2006 following the start of chip and pin, it rose to £263.6million in 2007.

Although the banking industry insisted that card fraud would have continued to rise sharply if chip and pin had not been introduced, in reality it has provided only a temporary halt, with fraudsters finding new - and more lucrative - ways to operate.

Last month, police warned that many gangs have installed fake chip and PIN readers in small shops and petrol stations to record the information on a credit card's magnetic stripe. A security camera then notes the customer's PIN before the card is cloned and used at a cash machine, usually abroad. Police suspect the money raised is not only fueling the activities of international criminal gangs involved in drug running and prostitution, but also terrorism

However, Sandra Quinn, of APACS, insisted: 'Criminals continue to target those areas where we do not currently have the security benefits of chip and pin, causing increases in fraud abroad and phone, internet and mail order shopping fraud.

"Fraud abroad will be more difficult for criminals to commit as more countries roll-out chip and pin. (Last I heard, the US isn't going to spend the billions of dollars needed to roll out that program, so I would translate that as "Fraud abroad will continue to be easy for criminals...)

"To help tackle online fraud, we urge shoppers to protect their computer with anti-virus software, only use secure websites and use systems that make cards more secure when shopping online."

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Debit Card Growth/Preference is Global

Posted by John B. Frank Monday, June 30, 2008 0 comments

Last Wednesday I blogged about how Debit Dominates China's Bank Card Market accounting for a whopping 93.4 percent of the market total! This week, APACS announced that in the U.K. debit cards continue to be consumers first choice in 2007 accounting for 72% of of plastic card transactions in the U.K. market.

Yesterday, I talked about Canada's shift to Chip and PIN, and a couple of weeks ago, I mentioned that even Malta is jumping on the Chip and PIN bandwagon. Thus, it is becoming empirically evident that debit card growth will continue at breakneck spead, not only here in the U.S., but everywhere across the globe. That's good news for HomeATM and "every organization" involved in our quest to bring PIN Debit to the Internet.

APACS has announced that £354 billion was spent on plastic cards in the UK in 2007 - a 10 percent increase over 2006 - and that spending of debit cards accounted for 62 per cent of total plastic card spend and 72 percent of total plastic card transactions. Debit cards were used to make 4.9 billion purchases in the UK while credit and charge cards were used to make 1.9 billion purchases. Credit card credit outstanding in the UK fell by £1.1 billion during 2007.APACS has announced that £354 billion was spent on plastic cards in the UK in 2007 - a 10 percent increase over 2006 - and that spending of debit cards accounted for 62 per cent of total plastic card spend and 72 percent of total plastic card transactions. Debit cards were used to make 4.9 billion purchases in the UK while credit and charge cards were used to make 1.9 billion purchases. Credit card credit outstanding in the UK fell by £1.1 billion during 2007.

Here's APAC's Press Release:

In the U.K. Debit cards continued to be consumers’ first choice during 2007
2007 plastic card data show:· £354 billion spent on plastic cards in the UK in 2007.
Debit card spend accounted for 62 per cent of total plastic card spend

APACS’ latest publication The Way We Pay 2008: UK Plastic Cards shows that in 2007, for the 7th year running, debit cards continued to dominate consumer card spending, accounting for 62 per cent of the total plastic card spending during the year. UK plastic card payments to UK merchants, retailers and service providers totalled £354 billion in 2007 – over three times the amount of ten years ago (£103 billion in 1997) and a 10 per cent increase on the 2006 figure (£321billion).

Sandra Quinn, director of communications at APACS, said: “Over the past 3 years we’ve seen a pattern emerge: debit cards have increasingly become consumers’ first choice over other options, such as cash, cheques and credit cards. And whilst these figures are for last year, surprisingly despite lots of speculation, all the early indications from our figures so far for this year show that there has been no sudden spike in credit card spending. In fact, credit card spending up until the end of May increased by only 1.2% – below the rate of inflation, and the average value of a credit card purchase in a supermarket has actually fallen by £1 to £34.33(4).

"Interestingly the report also shows that last year debit cards even gained ground in areas where credit cards have traditionally had a firm hold – particularly on the internet. We would, however, continue to remind customers that because of the additional consumer protection benefits credit cards provide, you may find a credit card to be a more sensible choice online.” The £354 billion spent on plastic cards during 2007 equated to 31% of total consumer spending in the UK, with the remaining £771 billion made up of cash, automated payments and cheques.

Debit cards were used to make 4.9 billion purchases in the UK, and by 2017 it is projected that there will be around nine billion debit card payments. Over the last decade debit card spending has increased five fold from £45 billion in 1997. This upward trend is expected to continue, by 2010 personal spending by debit card is expected to overtake personal spending by cash, and by 2017 it’s expected to reach £469 billion.

During 2007 credit and charge cards were used to make 1.9 billion purchases in the UK to a value of £133 billion – an increase of 6% per cent on 2006 figures. This rise in credit card spending did not lead to any increase in borrowing as the amount of credit card credit outstanding fell by £1.1 billion during 2007

For information on how to order a copy of The Way We Pay 2008: UK Plastic Cards and details of other APACS publications available to purchase, please visit www.apacs.org.uk/publications.html

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More on Australia's PEN or PIN Program

Posted by John B. Frank Friday, June 6, 2008 0 comments

Credit card users will be given the option of entering a PIN as an alternative to signing their name to authenticate a transaction under a banking industry initiative scheduled to start today. (June 4th)

Simon Greig, principle for Phoenix IT&T Consulting — contracted by the industry to manage the transition to the 'Pen or Pin' project for credit card transactions — says all of the banks are ready for the move. The main impetus for the initiative, led by Mastercard and Visa, is convenience and not necessarily security, he said. "The objective here is to provide a choice for cardholders," he said. "Australian consumers have been using PIN numbers for decades on their EFTPOS cards, and now they will have that option on their credit cards." "This is not a fraud-related activity," he said. "'It's simply about an option of convenience for cardholders that would like to use a PIN.

And for the retailer, they don't have to use their discretion to judge a signature." The initiative is unrelated, Greig said, to chip and PIN technology being pitched by some banks to reduce credit card fraud. Most Australian banks — including Westpac and the Commonwealth Bank, are trialing chip and PIN technology — which replaces the magnetic strip of a credit card with a microchip — and requires customers to enter a PIN number. It is deemed to be a far more secure approach to today's credit card transactions.

A spokesperson for the Commonwealth Bank told ZDNet.com.au that the bank does expect 'Pin or Pen' to "afford the customer additional [security] protection", but believes the real gains in security terms are more likely to be addressed by chip and PIN. "[Commonwealth] Bank takes card security very seriously and is currently working on its chip card solution," the spokesperson said.

Upon introduction in the UK, chip and PIN security faced its share of teething problems. However, the UK experience, says Greig, involved consumers that had rarely used PIN numbers engaging in a "massive leap" into chip and PIN. He doesn't expect such issues to arise in Australia, where consumers "have been using PIN numbers since the seventies. He also doesn't see 'Pen or Pin' being used as an excuse by banks to transfer liability for fraudulent transactions onto merchants and users, as UK banks have aimed to with chip and PIN. Greig said that under the new 'Pen or Pin' option, cardholders and merchants will be bound by the same rules and regulations using a PIN number as they would if a signature option was used."I have not heard of anybody changing their terms of use," he said.

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Latest Malta-Pull...PIN Replacing Signature Debit

Posted by John B. Frank Thursday, June 5, 2008 0 comments

Malta

The Bank of Valletta in Malta announced that it has issued the first EMV Chip and PIN Cards through its systems.

“This is an important milestone in the process that will see us issuing EMV Chip and PIN Debit and Credit Cards to our customers over the coming weeks,” said Tonio Depasquale, CEO at Bank of Valletta. “By the end of the current year, we would have replaced most of the existing cards with the new EMV Chip and PIN Cards,” he added, explaining that this is a complex logistical exercise that is seeing the bank implement this new technology for the benefit of its customers.

“We are delighted to have reached this stage whereby, over the coming weeks, we will be starting the process of replacing the debit and credit cards of our customers who will be able to benefit from the new generation cards that we will be issuing,” added Mr Depasquale.

The new EMV Chip and PIN Cards that Bank of Valletta will be issuing over the coming weeks offer customers a number of benefits over the cards that are currently in circulation, including improved security and a more efficient payment process. In fact, when using the new EMV Chip and PIN Cards, the cardholder authorizes the transaction by entering his PIN on the keypad of the Electronic Point of Sale Terminal (EPOS). This is faster and more secure than the system in place today where the customer signs a receipt generated by the EPOS to authorize the transaction. The new technology also provides additional security and process-related benefits to the merchants.

Malta, officially the Republic of Malta (Maltese: Repubblika ta' Malta), is a small and densely populated island nation comprising an archipelago of seven islands, three of which are inhabited. It is located in the Mediterranean Sea in Southern Europe just 93 km (58 mi) south of Sicily, giving the country a warm, Mediterranean climate, and 288 km (179 mi) to its south is North Africa.

Throughout much of its history, Malta has been considered a crucial strategic location due in large part to its position in the Mediterranean Sea.^[3] It was held by several ancient cultures including Sicilians, Romans, Phoenicians, Byzantines and others. The island is commonly associated with the Knights of St. John who ruled it. This, along with the historic Biblical shipwreck of St. Paul on the island, ingrained the strong Roman Catholic legacy which is still the official and most practised religion in Malta today.

The country's official languages are Maltese and English, the latter a legacy from Malta's period as a British colony – the United Kingdom is the most recent outside ruling power. Malta gained independence in 1964 and is currently a member of the Commonwealth of Nations, as well as the European Union which it joined in 2004.