According to APACS Card fraud in Britain dropped by 5% in first six months of 2006 due to new chip & pin technology.
Card fraud in Britain dropped by 5% in first six months of 2006 and the new chip & pin technology has been highly effective and helpful, as per a study by APACS (Association of Payment Clearing Services), UK payments association. Card fraud losses declined to US$ 397 Million from US$ 415 Million during the same period (first 6 months) of 2005.
It is now compulsory for shoppers in Britain to use chip & pin technology, instead of signatures for goods & services. As per APACS, this has been a quite effective solution in stopping card frauds.
Chip & Pin is an initiative taken by UK govt. to implement EMV standard used for secure transactions. Under this technology, banks & retailers have replaced traditional magnetic strip with embedded microchip, which is authenticated automatically through a PIN. Whenever a customer wants to make payment, card is inserted in a 'PIN pad' that accesses chip on card. Once authentication is complete, customer enters the PIN, which is verified against the number stored on card.
However, further analysis indicates that many British citizens are still unaware of basic security dangers. As, 22% of people have revealed their PIN (Personal Identification Number) to others, exposing themselves to an increased risk of being victimized of card fraud.
However, 27% of people use identical PIN for every card they have, which makes the task easier for criminals, provided every cardholder in UK, on an average, possesses 4 cards. In UK, 44% citizens allow their cards go out of sight (while in restaurants & bars, for instance) putting them at an increased risk of being victimized.
Fake card fraud increased by 16% to reach US$ 101 Million, where scam artists copied details of magnetic strip & captured PIN using hidden cameras present near cash machines.
As per APACS, there's evidence to indicate that scammers are targeting cash-points or international markets because stolen cards can't be utilized for shopping in-person due to chip & pin requirement. Almost US$ 75 Million were stolen in cash-point crimes, a rise of 37% from 2005.
"In the wake of increased information threats and rising instances of intrusion and hacking, the worldwide market for Network security Appliance & Software is expected to grow to US$6 Billion by 2009", estimates the report "IT Security Market Worldwide (2006-2007)" published by RNCOS.
Meanwhile, banks are looking to adopt a new technique of handheld card readers that can be used by customers at their homes to reduce online frauds, which have resulted in 55% increase in losses to banks.
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