BY KARENA BENNETT Business reporter bennettk@jamaicaobserver,com SCOTIABANK Jamaica will be implementing a security system to further minimise credit and debit card fraud within another 12 months.
Wednesday, December 17, 2014
SCOTIABANK Jamaica will be implementing a security system to further minimise credit and debit card fraud within another 12 months.
The CHIP/EMV card processing system will require customers to insert their cards into point-of-sale terminals instead of swiping, to authenticate transactions. This should allow for faster processing at checkout points in addition to enhanced security, according to Monique Todd, Scotiabank Jamaica’s vice-president of marketing, public and corporate affairs.
“Plans are already well on the way for Scotiabank to switch over to the CHIP/EMV card processing system by the end of 2015,” Todd told the Jamaica Observer in an e-mailed response. “Once fully implemented, customers will no longer need to sign transaction receipts and verify their signature.”
EMV, or Europay, MasterCard and Visa card, has already been implemented in a number of countries, including the United States. A study conducted in that country estimates that close to 1.1 billion EMV cards will be issued by the end of 2015, costing banks US$3.85 billion ($435 billion) to issue the cards and another US$6.5 trillion ($734.5 trillion) for the upgrading of point-of-sale systems to become EMV-compliant.
Traditionally, electronic cards use a magnetic strip which stores data, allowing anyone who accesses the data to gain sensitive information. However, the new card will feature a small magnetic square that will increase protection against fraud, by creating a unique transaction code each time the card is inserted for payment.
For the first few months, the EMV cards should be equipped to use both chip and magnetic-strip functions to avoid disruptions and allow time for merchants to adjust. While the new system will not prevent data breaches from occurring, Scotia believes it will make it much harder for hackers to conduct fraudulent transactions.
Over the last five years, commercial banks have seen a significant increase in the number of transactions carried out by credit and debit cards. A report by the Bank of Jamaica indicated that the banks recorded a 52 per cent increase in credit card receivables, moving from $11.6 million at the end of June 2009 to $24.3 million for the comparative period this year.
Still, credit card fraud has amounted to more than US$58,000 and J$34 million during the first five months of this year, and is now classified as the most productive means of swindling local currency from bank customers.
Scotia has been strengthening its online banking security system after recording a $150-million loss over a nine-month period to debit and credit card fraud transactions in 2010. Since then, the bank has managed to reduce the number of credit and debit card liabilities by 57 per cent.
The EMV, or Europay, MasterCard and Visa card, has already been implemented in a number of countries, including the United States
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Scotia moves to further reduce credit/debit card fraud
