The Bankwatch

Tracking the consumer evolution of financial services

Archive for the ‘Debit cards’ Category

The pains of travelling and paying in a world moving to EMV

Aneace correctly points out a consequential trend in card fraud, that is going to impact travellers plans. Chip card implementation is complex, and the fact that cards will be combo, chip and mag stripe merely increases the complexity.

Aneace’s Blog: The pains of travelling and paying in a world moving to EMV

The explosion in ATM/debit card fraud shows how fraud can move to the US from other parts of the world, like the UK, where card issuers are adopting the more secure EMV chip card standard. Some US banks have responded by putting a temporary hold on all ATM transactions in the UK, leaving some customers stranded. Cardholders are advised to alert their bank when they plan to travel, and to carry multiple cards for multiple accounts and extra travellers’ cheques, just in case. Wow. Blast to the past. Back to the good old days of travellers’ cheques and envelopes filled with cash.

Already we are seeing consumer trends such as:

  • carry four separate cards with $5K limit, versus 1 card of $20K
  • keep one card with less than 1K limit for internet purchases
  • request bank maintain cards separately from other accounts
  • hold credit card with another bank, that keeps the card separate from main accounts

Future trends:

  • chip card with no mag stripe
  • maintain low limit mag stripe card for travel, or non home bank, domestic use

Relevance to Bankwatch:
Card use is not simple nor are behaviours understood.  Chip will reduce some fraud generally, but introduce a high level of complexity in consumers minds that drives aberrant card behaviour.

Written by Colin Henderson

June 27, 2006 at 21:49

Posted in Chip Cards, Debit cards

Security Expert Says Chip-And-PIN Facilitates ATM Fraud

Now that UK has moved to pin/ debit, this security expert points out that the opportunities for fraud are expanded because of the variety of security in existence at the point of sale endpoints that now require PIN.  This has always been the case in Canada, and its known that POS terminals are one of the weak links in the network infrastrucuture. 

Card Technology, The Smart Card News Source

Today, however, consumers must enter their PINs at any point-of-sale terminal, which makes it much easier for criminals to obtain the data, Bond says. “Now there are hundreds and hundreds of thousands of devices, with a lot more variety in the levels of security as well,” he points out.

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Written by Colin Henderson

May 10, 2006 at 16:45

Posted in Debit cards, Payments

Wiki’s are not for everyone; banks can use for thought leadership

There is much talk about the importance of Web 2.0 and a new sub thread is evolving on the use of such tools within the enterprise, so lets look at Wiki’s in particular.

Andrew speaks eloquently here but I fear this school of thought is getting too caught up in the technology, and generalising about the tools.  Typical Web 2.0 tools are quoted as Wikipedia, Flickr, MySpace,, Digg, and I would agree on most of what is discussed on the utility of those tools, particularly with the inclusion of blogging. I think the customer interface and connection with the average user for these tools will need to be improved to be useful for everyone, but the basics are there.  Tagging is a great example with leading that charge, but their interface is horrible.  Nonetheless I remain convinced tagging will be core to online banking in the near future.

The exception could be wiki’s – useful as Wikipedia is, wiki’s are at best clunky and awkward for the average person.  These statistics quoted on the Church of the Customer bear that out.  Only 1-2% of wiki users actually contribute.  This is not a bad thing, but it suggests Wiki’s are good for sharing evolutionary thoughts on an interest, authored by a few core leaders, and read by many.  Wiki’s are not a tool for work sharing and interaction, which assumes equal participation.


Relevance to Bankwatch:
Many powerful tools are appearing, and they will change online banking.  In particular, three tools to watch that smart Banks will lever are:

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Written by Colin Henderson

May 7, 2006 at 01:48

Posted in Debit cards, Web/Tech

North American ATM’s are falling behind

ATM’s across the world are being used for new and innovative services, that keep customers satisfied.  North American ATM’s just provide the basics. – The Envelope-Free ATM

In Russia, a consumer can put rubles into an automated-teller machine and get U.S. dollars in return. In Brazil and Venezuela, the machines print checks. And banking customers in Indonesia can use an ATM to schedule and pay for the ritual sacrifice of a goat.

However something as simple as envelopeless cheque depositing which sounds cool, is not necessarily a good use of investment.

Unlike traditional machines that swallow an envelope and require the customer to key in the deposited amount, the new versions read checks and count cash themselves. They can display an image of the check on the screen, and also print an image of the deposited check on a customer’s receipt. Bank executives literally “oohed” and “aahed” when a representative of ATM maker NCR Corp. demonstrated the technology at an industry conference last fall.

The costs of the cameras and cheque handing, to achieve this are significant, and given cheques are going away, does this make sense?  Perhaps the North Americans have this part right.

Relevance to Bankwatch:
The ATM manufacturers find it easy to wow Bank Executives in the ATM space because those folks generally haven’t been engaged in the online banking space.  The online bankers know innovation, and understand the importance (now, post dot com crash) of not getting caught up in the technology, and remaining focussed on the customers needs.

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Written by Colin Henderson

May 7, 2006 at 00:18

Posted in ATM, Chip Cards, Debit cards, US

The weakness in combo chip/ mag stripe cards

In a move by the criminals they highlight the weakness in combo chip / mag stripe cards. These are cards that have chip and mag stripe on them. This is the primary transitional approach taken by banks, to circumvent issuing separate chip cards, and mag stripe cards. Customers would require mag stripe for usage abroad where chip has not been implemented yet.

Guardian Unlimited | UK Latest | Eight held over chip and pin fraud

The scam works by criminals implanting devices into chip and pin machines which can copy a bank card's magnetic strip and record a person's pin number.The device cannot copy the chip, which means any fake card can only be used in machines where chip and pin is not implemented – often abroad.

Relevance to Bankwatch:
As predicted in an earlier 'relevance' I remain convinced that combo cards could be the death of chip, and the better approach would be to issue chip cards only with no mag stripe. If customers need a mag stripe for travel or other purposes, then they can get those. The problem is the transition of merchants to chip, so customers desire to have chip only cards is the best impetus for them.

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Written by Colin Henderson

May 6, 2006 at 23:52

Posted in Chip Cards, Debit cards

Value of Annual U.S. Debit Card Transactions to Reach $2 Trillion by 2010

US debit card growth continues to climb. 

Value of Annual U.S. Debit Card Transactions to Reach $2 Trillion by 2010: Financial News – Yahoo! Finance

Packaged Facts projects that debit cards will continue to enjoy strong growth, with annual debit transactions exceeding $2 trillion by 2010.

More and more debit cards are part of US life.

With nearly half (48.2%) of U.S. adults carrying a debit card, it’s not surprising that debit is quickly catching up to credit cards and cash as a primary means of point-of-service and online transactions. According to Debit Cards in the U.S., a new report from market research publisher Packaged Facts, the total transaction volume in the U.S. debit card market reached a phenomenal $907 billion in 2005, up 18.6% from 2004.

Written by Colin Henderson

May 5, 2006 at 22:49

Posted in Debit cards, Payments

Everybody is a technologist

In a follow up to yesterdays Oyster setback, TfL indicate in The Times that they are still keen to proceed, but can’t get the economics to work.  Again refer to yesterdays commentary here.  Its going to be hard to make this work, no matter how many boffins are stuck into that shed.  That comment is typical of the frustration of big companies who haven’t achieved the right level of integration with their technology groups.  Everyone/ company is in the technology business now, whether they like it or not.

TfL’s Oyster-card ambitions hit delays – Industry sectors – Times Online

TfL wants to use the cards, which are currently used by 5 million commuters to buy travel on London’s tubes, busses and trains, as the base for a much larger “electronic wallet” network.

“We think we need to lock the boffins in a shed and get them to come up with a solution that works. “The financial and technical ideas that we have seen so far have been too complex and we have not progressed as far as we would have liked.”

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Written by Colin Henderson

May 2, 2006 at 09:47

Posted in Debit cards, Web/Tech

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