New bank cards

Ronelle Ramsamy

IN an attempt to clamp down on rampant bank-card fraud, South Africa’s four major banks are currently planning to introduce new cards fitted with microchips as early as next year.
The new credit and ATM cards, which are already available overseas, are fitted with a microchip containing the cardholder’s personal and bank information and can store information pertaining to more than one account.
Operating with a PIN code, it is reportedly extremely difficult to clone the new card, which is hoped to significantly reduce bank-card fraud in the country.
According to Standard Bank Director of Architecture and Technological Engineering - Herman Singh, they issued the first 2 000 cards in November and will continue to issue the new cards in a gradual, phased-in approach.
‘We have already begun to modify all ATMs and point-of-sale machines around the country.
‘There are approximately 15 000 ATMs and between 150 000 and 180 000 point-of-sale machines that need to be upgraded,’ said Singh.
Although the operation is costing the entire banking industry billions of rands, Singh told the Zululand Observer that the banking industry was committed to protecting their consumers by combating credit and debit card fraud.
‘We are providing South African consumers with first world technology. The smart card or chip card is a plastic card but has a magnetic dark stripe on the rear with an embedded chip that plays the role of a small computer. If the chip does not work, the magnetic stripe comes into effect as a back-up system,’ said Singh.

Ready
According to CEO of First National Bank Credit Card - Jan Kleynhans, all FNB Speedpoints were ready to accept chip transactions and had been accepting international chip transactions for over three years.
‘The chip cards will still provide a fall-back to the magnetic stripe technology in order for the cards to be accepted at international merchants and ATMs. There is a massive need to start educating South African consumers on the impending implementation and to encourage the awareness of the move to microchip and PIN technology,’ said Kleynhans.
In an exclusive interview with the Zululand Observer, Kleynhans said FNB would continue to research and adopt new ways in which to counter fraud and protect the consumer.
‘While the microchip payment card is expected to be one such solution towards combating fraud, it forms a small part of an overall fraud prevention strategy and ultimately will still rely on the user’s ability to safeguard their PIN,’ said Kleynhans.
While South Africa joins the UK, Europe and many parts of the Far East with the implementation of chip cards, there are many countries including the US, where the migration to chip cards has not yet begun.