Bank card fraud drops

Even though the banking industry is only halfway with the issuing of Europay, MasterCard and Visa (EMV) compliant bank cards, a reduction in bank card fraud was already recorded last year.
According to Bank of Namibia (BoN) spokesperson Ndangi Katoma, the total card fraud value recorded a decline of 16% from N$2.4 million during the third quarter of 2015 (July to September) to N$2 million during the fourth quarter of 2015 (October to December).
The total number of fraud incidents for cards indicated a reduction of 37%, from 1 974 incidents in the third quarter of 2015 to 1 245 incidents in the fourth quarter of last year.
While it was initially intended for all bank cards to be EMV compliant chip cards by September 2015, in an effort to limit illegal cloning, the banking industry says that all cards will probably only be compliant by 31 March 2017.
The delay is being caused by the testing of infrastructure that is posing some challenges, but this is currently being attended to, said Katoma.
The industry initially expected to issue EMV compliant debit cards, credit cards and hybrid cards into the market by 30 September 2015, but was granted dispensation until 31 March 2016, through the Payment Association of Namibia (PAN).
The industry progress to date is that 100% of all point-of-sale (POS) and automated teller machines (ATM) are EMV compliant, with 54% progress in terms of issuing EMV compliant cards.
The new cards represent a move away from the typical static magnetic stripe cards, to new ones that contain an embedded microchip.
The new cards have the added benefit of reducing the use of stolen payment card data.
If data were compromised, a counterfeit card would be unusable without the presence of the card’s unique elements.
Katoma says that the EMV cards, while not completely clone-proof, do provide added security features that are able to reduce the use of stolen payment card data, and thus mitigating fraud risk in the industry.
According to Katoma conducting fraud or cloning EMV cards has become harder to achieve, due to the new technology on which the cards are based.
“The chip on the card provides strong transaction security features and additional application capabilities that were not possible with the traditional magnetic strip cards. Coupled with the chip, the customers’ unique and personally chosen PIN, adds an additional layer of security.”
Katoma, however, warns that even with the chip and pin cards, it is not guaranteed that the new technology will completely eliminate fraud.
“Technology is constantly evolving and the industry is equally working to ensure that possible fraud and cloning risks are at all times mitigated, through the improvement of infrastructure and improvement of the features of the products issued onto the market.”
According to him the BoN is closely monitoring the progress of EMV compliance and forms part of the periodic engagements and discussions that the industry undertakes on formal platforms. The BoN provides regulatory guidance on the matter, to ensure safety and efficiency within the National Payment System (NPS).
Katoma stressed that there was no directive, however, pertaining to the EMV compliance project issued by the Bank of Namibia. While the BoN embraces and supports this project, it remains an industry-driven and led initiative, he added.

ELLANIE SMIT