Feeds

Chip and PIN: not enough to beat card fraud

But you knew that already

  • alert
  • submit to reddit

SANS - Survey on application security programs

Chip and PIN payment cards are currently being trialed in Northampton, before a planned nationwide rollout. The introduction of chip and PIN will certainly be an important development in the fight against card fraud. However, as one police chief has now pointed out, new technology may only deflect fraudsters' attentions to other areas.

Chip and PIN payment technologies have rightfully been viewed as an important weapon in the fight against payment card fraud. Currently chip and PIN technologies are being trialed in Northampton and the nationwide roll-out is expected by December 2004.

Should the UK achieve this deadline, it will be the first country in the world to declare itself fully EMV compliant. EMV is the common standard that will eventually ensure that chip cards can be used in any country that has adopted it.

Yet, as a police chief has pointed out this week, chip and PIN technologies won't be the end of card fraud. Detective Chief Inspector Steve Eastwood, operational head of the dedicated check and plastic crime unit, has warned the outcome of the introduction of chip and PIN could be a shift in fraudsters' attentions to other, more vulnerable areas. In the payment space these are likely to be telephone, Internet and mail order transactions. Card not present (CNP) fraud, the collective name for fraud via these channels, amounted to GBP110 million in 2002, up by 15% on 2001.

It is also possible that the introduction of chip and PIN will result in an increase in identity fraud. Identity fraud is where fraudsters use personal details to order credit cards and check books in the name of someone else. In 2002, identity fraud was up 41% to GBP21 million.

So what is the answer to the card fraud conundrum? It must surely lie in joining up the various card fraud initiatives in a multi-pronged approach. This would include the move to chip and PIN but also the initiatives that have relevance to CNP transactions such as address verification and Visa and MasterCard's online security initiatives, branded Verified by Visa and MasterCard SecureCode. Launching this multi-pronged approach would ensure that every area of the payment space is sufficiently protected and that solutions in one area do not merely add problems to another.

© datamonitor logo

Datamonitor is offering Reg readers some of its technology research FOC. Check it out here.

Related stories

Smart credit on UK cards. Will it cut fraud?
Small.biz needs help with Chip and PIN
Joe Public blames banks for credit card fraud
Credit card firms 'profit from Net fraud'
How to get an ATM PIN in 15 guesses
Schoolgirl turns tables on email credit card fraudster
E-fraud costs retailers millions
Online gambling tops Internet card fraud league

High performance access to file storage

More from The Register

next story
Obama allows NSA to exploit 0-days: report
If the spooks say they need it, they get it
Samsung Galaxy S5 fingerprint scanner hacked in just 4 DAYS
Sammy's newbie cooked slower than iPhone, also costs more to build
Snowden-inspired crypto-email service Lavaboom launches
German service pays tribute to Lavabit
Mounties always get their man: Heartbleed 'hacker', 19, CUFFED
Canadian teen accused of raiding tax computers using OpenSSL bug
One year on: diplomatic fail as Chinese APT gangs get back to work
Mandiant says past 12 months shows Beijing won't call off its hackers
Call of Duty 'fragged using OpenSSL's Heartbleed exploit'
So it begins ... or maybe not, says one analyst
prev story

Whitepapers

Top three mobile application threats
Learn about three of the top mobile application security threats facing businesses today and recommendations on how to mitigate the risk.
Combat fraud and increase customer satisfaction
Based on their experience using HP ArcSight Enterprise Security Manager for IT security operations, Finansbank moved to HP ArcSight ESM for fraud management.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Five 3D headsets to be won!
We were so impressed by the Durovis Dive headset we’ve asked the company to give some away to Reg readers.
SANS - Survey on application security programs
In this whitepaper learn about the state of application security programs and practices of 488 surveyed respondents, and discover how mature and effective these programs are.