The Bankwatch

Tracking the consumer evolution of financial services

Archive for the ‘Chip Cards’ Category

Consumers still need convincing on smart cards

Fewer than half of consumers would  switch to smart cards according to a “survey” by  terminal makers Ingenico. They arrive at the conclusion based on surveying people using the cards.

There is an enormous gap between use of cards, and the benefits of the cards.  The simple truth is that people do not associate any benefits with the switch to the smarter cards.

Convenience to drive contactless uptake, but consumers still need convincing | finextra

Convenience, rather than security, will be the driving force behind the UK adopting new payment methods, according to a survey of 1000 British consumers conducted on behalf of Ingenico.

Written by Colin Henderson

February 15, 2009 at 23:04

Rogers Wireless joins RBC and Visa m-payments pilot

This is an exciting development.  After reporting on the far east and their advances in types of wireless payments, RBC in Canada and Rogers wireless announce a new pilot in the works. 

Rogers Wireless joins RBC and Visa m-payments pilot

RBC (Toronto:RY.TO)(NYSE:RY), Visa and Rogers Wireless have come together for the next phase of the mobile phone payment pilot, which will ultimately allow Canadians the flexibility to make purchases securely at the point of sale with a wave of their mobile phone.

Its to be aimed at small payments, and using Motorola phones.  That latter point is a hinderance it its limited to one phone, but hopefully thats only for the pilot.

The technology used is Near Field Communication (NFC) that is described at Wikipedia as –

a short-range high frequency wireless communication technology which enables the exchange of data between devices over about a 10 centimetre (around 4 inches) distance.

In Tokyo last time I noticed the prevalence of smart wireless payment cards.  I have a Pasmo card that was for the subway, and now I can use in convenience stores, and other merchants.  Which all leads to the question of whether the future will be contacless cards or phones.  The answer is likely both.

Others in Japan:

Suica issued by JR East (Railway). Uses RFID.

Pasmo issued by Passnet (other rail providers than JR).  Uses RFID.  Works best for Tokyo people because it works on Tokyo Metro.

Registered PASMO

Written by Colin Henderson

November 2, 2008 at 23:44

IBM makes pilot security devices available for financial institutions to trial

IBM come out with an innovative security measure that actually makes sense.  It makes far more sense than the two factor authentication tokens many banks have been wasting their time with. 

It also sounds like it requires no work on the FI end – so its a no brainer to trial this one!

IBM unveils USB stick to fight online banking fraud | Finextra

IBM has unveiled a prototype USB stick designed to secure online banking transactions against malware and man-in-the-middle attacks.

The Zone Trusted Information Channel (ZTIC) plugs into the USB port of any computer to add an extra layer of security on top of existing authentication systems like smart cards, PINs and one-time validation codes.

This device in simple terms bypasses your PC and goes straight out over a secure connection to your bank. 

What the user sees on the ZTIC display is identical to what the server "sees".

In addition it can be supplemented by a smart card log in.

Relevance to Bankwatch:

Kudos to IBM for this.  The two factor tokens to date are not protection against all possible attacks, including man-in-the-middle in particular.  While I have always felt consumers would balk at an additional device, that view was qualified by the limited benefit. 

If in fact a device exists that guarantees security, then that is completely different story.

Views in support or to the contrary welcomed.  This is an important topic for ecommerce, and for online banking.

Written by Colin Henderson

October 29, 2008 at 23:33

Chip and pin Canada | the basic flaw

Canada begins the official rollout of chip and pin following 3 years of implementation, and testing.  Good stuff.  However I remain befuddled by one thing, and no amount of discussion with “chip experts” removed this doubt from my mind.  The issue is the retention of the magstripe on the card.

Canada begins Chip and PIN roll out

Chip cards will continue to carry the magnetic stripe to allow cardholders to use their debit cards in other countries that do not use chip technology.

By definition, that means the card can be cloned, and used in a magstripe country.  We just happen to have the largest magstripe country in the world next door – USA.  The US has no plans to move to chip.  This is a country of 300 million people, and lots of merchants with a less than stellar record for security.

Relevance to Bankwatch:

Why can Canadian banks not issue cards with chip only.  For customers who require the convenience of magstripe in the USA, charge them $20 – $40 for the extra card, with no chip.  That extra card could have access to a limited amount of funds, or a limited time window to accommodate vacations.  Offer up preferences in online banking to manage their magstripe preferences. 

Given the fraud environment in 2008 customers would pay for that service.  Until we get to 100% chip with no magstripe, fraud is just an opportunity for the bad guys.

Thoughts from the chip experts?

Written by Colin Henderson

October 28, 2008 at 23:23

Posted in Chip Cards

The problem with card fraud is getting worse

Dave writes up the latest on card fraud in Europe and UK and touches on the US.  As Simon points out in the comments, its a chilling read, and highlights that the slow and gradual shift to secure cards and terminals is just wrong. 

I have similar worries for North America as US sticks to mag stripe, and Canada to chip and mag stripe combined.  The opportunities for criminals are simply too great.

I didn’t want to write about fraud yet again, but… | Digital Money Forum

Total card fraud last year was UKP 535 million (about a billion dollars) but the half-yearly figures for 2008 are predicting a full year well in excess of UKP 600 million. The prospects of fraud reducing remain, I think, slightly gloomy.

Written by Colin Henderson

October 22, 2008 at 21:42

16% of Japanese mobile users use digital wallet

Dave links to a report that highlights usage of cell phones as a digital wallet in Japan. Great statistic here … almost 16% use their phone for this purpose.

Digital Money Forum: We should have such problems

Only a sixth of mobile phone subscribers use their handsets as contactless wallets! ONLY A SIXTH!! Well, here in the U.K. it’s about 0.001% so I’m quite jealous. Not just of Japan, but of lots of other places.

Written by Colin Henderson

April 24, 2008 at 18:40

Posted in Chip Cards, Payments

Cash vs prepaid smart cards

Aneace summarises the last presentation suggesting that cash is under-priced hence smart cards, and electronic purses / prepaid cards are not as successful as they could be.

Aneace’s Blog: A solution to the interchange dilemma

the only solution to the interchange problem is to raise the price of cash to match its cost, for example through an ATM charge

Aneace is right that this is a political and bank non-starter, because the secondary revolt would out-weigh the benefit.

Prepaid cards acceptance, and cash reduction, can only succeed, once someone figures out a better mousetrap.

Written by Colin Henderson

April 23, 2008 at 10:41

Brits struggling with PINs – survey | finextra

In a survey that probably understates the matter, Brits are using the same password for multiple cards.

Finextra: Brits struggling with PINs – survey

Around a quarter of cardholders in the UK are putting their money at risk by using the same PIN number for all their credit and debit cards, according to research commissioned by price comparison Web site Moneysupermarket.

This is no surprise, and rather than being seen as a problem, should be seen as an opportunity by the industry to consider additional assistance for people. Biometrics spring to mind, such that cards can only be used by the owner.

Written by Colin Henderson

April 23, 2008 at 02:51

Posted in Chip Cards

e-cash applications need better design for consumers to accept

Interesting review of the customer view while trying to use the Barclaycard OnePulse card.  Dave makes the point that the merchant benefits are clear, but the benefit to the consumer at the point of purchase is confusing, and in this case slower than cash.

Digital Money Forum: Slow penetration

When I waved my card at the reader, nothing happened. The woman serving me asked if I really wanted to use the “terminal”. I said yes. She said: “It will be an extra five pence”.

Whether it’s the lack of suitable terminals for the kinds of merchants,
miscommunication between acquirers and merchants about benefits, simple
unfamiliarity or whatever, I hope someone on the business side has a
handle on this.

Written by Colin Henderson

February 19, 2008 at 08:24

Posted in Chip Cards

Chip transaction protection comes a step closer in Canada

This first transaction brings Canada closer to being in line with Asian and European countries with chip and pin protection for debit and credit transactions.  [hat tip to Payments news]

Interac Association – Media > Press Releases

Toronto, Ontario, September 12, 2007– As part of its commitment to providing the safest and most secure payment network, Interac Association today announced the completion of Canada’s first INTERAC debit card transaction at the point-of-sale terminal using chip technology. The transaction was processed today by TD Merchant Services using a BMO Bank of Montreal chip debit card at Mercato Giovanni’s Fresh Food located in downtown Toronto. The chip debit card transaction was conducted in preparation for the Kitchener-Waterloo, Ontario market trial of chip technology which will begin in fall 2007.

Written by Colin Henderson

September 16, 2007 at 17:42

Posted in Chip Cards

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