Payments Security

Payments fraud is no longer a niche or opportunistic fraud. As the scale and sophistication of payment products and channels have grown, so have the threat and magnitude of fraud.  Reliable and secure payer authentication and verification are critical to the integrity of any payment scheme and instrument. Over a year ago, in the UK the card industry rolled out the CHIP and PIN scheme to combat card fraud.  OK, so CHIP and PIN has had a bumpy ride , it has its fans and its critics ; and we have all read the horror stories about lack of security , about crooks breaking into PIN pads and steeling PIN numbers in flight and so on and so forth. But the fact remains that as well as significantly reducing card fraud in the UK, the PIN and CHIP scheme has actually  been a great catalyst for the introduction of point of sale e-payments facilitating much improved customer service and convenience in all sorts of businesses large and small. It has also enabled many SME retailers (including my barber!)  to enjoy better , faster and cheaper payment processing services.

However the CHIP and PIN scheme does not address the issue of card fraud in Card Not Present situations like Internet , telephone and other remote types of payments. Nor does it really offer effective protection in countries where their CHIP and PIN is not compatible with our version in the UK, even though they are all supposed to be based on the same EMV standard. But that is another story.  So being very mindful of their customers' protection some UK issuers have come up with a very innovative solution to stop ATM card fraud abroad. They reject your card!! This has happened to a few people I know while they were in Spain and in Ireland! Despite sufficient funds and despite the correct PIN number their cards were rejected, the only solution was to call into a local bank branch, produce their passports as proof of ID and sign bits of paper to get their hands on their own money.  I saw an article somewhere recently saying that UK issuers were working on a proposal to issue all their cardholders with their own CHIP and PIN devices for use at home for remote payments! Next thing you know every new house will come in with an ATM built in as standard, in the kitchen next to the fridge. Actually, come to think of it perhaps........

So what? Well, don't you think it is time that our great financial institutions and their friends in San Francisco and in Purchase, NY took a fresh holistic approach to card payments and produced a single universal authentication and verification scheme for all card products and all usage type?