Smartcards aim to increase transaction safety

August 2002 Access Control & Identity Management

Credit card fraud and shrinkage are two of the biggest bugbears facing retailers. However, as the smartcard begins to find favour in the retail sector, a host of additional security features are about to be ushered in.

Pierre Kotze, financial services executive at Integrated Card Technology (ICT), the smartcard manufacturer in the NamITech stable, said smartcards are effective in combating two major types of fraud: counterfeiting, where genuine data is acquired and encoded on a fake magnetic stripe card; and lost and stolen cards. According to Kotze, smartcards also put an end to the problem of cards not being received by bank customers, which are known as not received items (NRI). This happens because they have either been lost or stolen during the process of delivery.

Recognising the importance of chip technology to the future of the plastic payments industry, Europay International, MasterCard International and Visa International joined forces to facilitate the migration to smartcard technology.

The result was the integrated circuit card (ICC) specification for payment systems, known as the EMV ICC specification for payment systems.

With these specifications in place, said Kotze, the three card associations have paved the way for universal acceptance of chip-based transactions for credit, debit or ATM cards.

"Smartcards," said Kotze, "come with a myriad of advantages which can be of benefit to the retailer. When using a magnetic stripe credit card, the cardholder's signature is commonly used as verification. However, even the most diligent of merchants do not like inspecting cardholder signatures in detail; it creates a feeling of mistrust, and in some countries is regarded as socially unacceptable. If a mismatch is suspected, the confrontation is a personal one between the cashier and the cardholder. There also is no way to show whether or how thoroughly the check was done. Therefore, retailers are looking to chip to provide the route towards an objective, and preferably automatic, cardholder verification method such as the personal identification number (PIN). So a criminal with a lost or stolen card would need to know the PIN before the card could be used. PIN will ultimately yield to biometric information like a fingerprint minutia on the smartcard as that technology becomes more widespread and more economical."

Commenting further, Kotze said credit card issuers can remotely disable a stolen card, reducing the reliance on merchants' confiscation - and on their systems. Merchants sometimes disregard confiscation requests during a transaction, meaning the cardholder can use the card again at another location. "By instructing the POS terminal to disable the card that has been reported stolen, issuers can curtail fraudulent use without relying on store clerks."

Kotze adds that besides advantages to the retailer, smartcards also give the bank control over the actions of their cardholders by controlling the number and/or value of transactions that can be completed off-line, without compromising security, prior to the requirement of an authorisation.

For more details: NamiTech, 011 458 0000.





Share this article:
Share via emailShare via LinkedInPrint this page



Further reading:

Simple steps to protect yourself against identity theft
November 2019 , Access Control & Identity Management
Are you doing enough to reduce the risk of having your identity stolen?

Read more...
Looking ahead with mobile access technologies
Access & Identity Management Handbook 2020, Technews Publishing, HID Global, dormakaba South Africa, Salto Systems Africa, Suprema, Gallagher , Access Control & Identity Management, Integrated Solutions
Given the broad use of smartphones around the world and the numerous technologies packed into these devices, it was only a matter of time before the access control industry developed technology that would ...

Read more...
Mobile access is more secure than card systems
Access & Identity Management Handbook 2020 , Access Control & Identity Management
The ability to use mobile phones as access credentials is one of the biggest trends in a market that historically has been slow in adopting new technology.

Read more...
This is the future. This is what we do.
Access & Identity Management Handbook 2020, ZKTeco , Access Control & Identity Management
ZKTeco has created a unique range of visible light facial recognition products combined with a flexible Android platform.

Read more...
The security of biometrics
Access & Identity Management Handbook 2020, ViRDI Distribution SA, IDEMIA , Technews Publishing, Suprema , Access Control & Identity Management
Hi-Tech Security Solutions asks whether your personal biometric data is safe from prying eyes.

Read more...
A picture spoofs a thousand cameras
Access & Identity Management Handbook 2020, NEC XON, Hikvision South Africa, Technews Publishing , Access Control & Identity Management
Hi-Tech Security Solutions looks into the reliability and effectiveness of facial biometrics as well as the concerns about privacy.

Read more...
IoT and behavioural authentication
Access & Identity Management Handbook 2020, CA Southern Africa , Access Control & Identity Management
IoT represents an increasing security risk to individuals in the form of pervasive, always-on monitoring of your personal activity with a potential compromise of your most personal security credentials.

Read more...
Border crossing and national identification
Access & Identity Management Handbook 2020 , Access Control & Identity Management
Amidst a choice of technologies, diversity of policy frameworks, and emergent priorities, countries that intend to upgrade their identification systems today find themselves drawn into a complex vortex.

Read more...
T&A by biometrics in the cloud
Access & Identity Management Handbook 2020 , Access Control & Identity Management
Time and attendance solutions have evolved from punch cards to cost-effective and more accurate cloud-based biometric systems.

Read more...
Scalable access solution
Access & Identity Management Handbook 2020 , Access Control & Identity Management, Integrated Solutions
Bosch Building Technologies makes access management simple, scalable and always available with Access Management System 2.0.

Read more...