Responding regionally to credit card fraud

My first reaction to the news of Citi's special concierge (in which a reliable intermediary facilitates Singaporean online shoppers using US web stores) was, well, someone's going to be paying a nice premium for this security service.  Probably merchants and cardholders alike.  Presumably the service only accepts Citi cards?

But another response is that this is an example of an institution acting to better serve a targeted region.  There could be all sorts of reinforcing factors, like local marketing campaigns, special new card products, and related financial products in the mix.

Another way for US banks and merchants to deliver improved security to targeted regions would be to exploit the more advanced penetration of Chip-and-PIN and  smartcard readers.  In Taiwan for instance, the entire retail banking sector went from mag stripe to chip some five or six years ago.  With Taiwanese banks offering "Internet ATM", the local market for smartcard readers flourished; in excess of two million smartcard readers have been bought by regular bank customers. It's early days in the UK, but as blogged on Finextra recently, there are readers on the market there now too, presumably in anticipation of a rise in use of Chip-and-PIN cards in the web channel.

So, if a bank can set up and market a concierge service to facilitate web shopping by card holders in Singapore, it could just as well target customers in markets where chip cards and readers are commonplace, or where resistance to smartcards has disspipated, as in Hong Kong, Malaysia, France, Belgium and elsewhere.  The benefit for US merchants and local cardholders alike would be robust new online protection against CNP fraud.

Cheers,

Stephen Wilson.