Smartcards make perpetrating fraud a lot more difficult than traditional magstripe cards, especially in regions where offline processing is the dominant method for processing transactions. As a result, and even though we have driven payment card fraud to an all-time low, our industry is seriously exploring how smartcard technology can drive the evolution of payment card security.
Microchips have made their way onto payment cards across the globe, with 257 million MasterCard-branded chip cards now in use.
The offline world is not the only place where smartcards can enhance security. With consumer online banking and e-commerce on the rise, the industry has moved quickly to implement solutions with stronger authentication.
Smartcard technology has been at the heart of that movement, protecting online transactions through the use of dynamic, computer-generated codes.
Smartcards bring other advantages, too. Being able to store an array of data, the technology offers many advantages to merchants and customers. It eliminates the need for signature identification, as well as the need to manage, store or retrieve paper slips.
Smartcard transactions are faster than magnetic stripe transactions and can take as little as two seconds to complete payment.
What’s more, smartcards enable merchants to launch customer loyalty programs and generate discounts and special offers targeted directly at individual purchasing practices.
The success of smartcards cannot be denied, but the challenge facing the payments industry today is determining how to foster such change in all our key markets. The payoff – additional security, quicker checkouts, true one-on-one marketing – is well worth it.
That is why we must all continue to be vigilant and open-minded, exposing ourselves to innovation going on outside our immediate purview.
This means participating in cross-industry conferences and forums that lead to true, global collaboration. It also means soliciting the involvement of all of your stakeholders to build the next generation of your security strategy – including customers and partners.
One day, with the help of smartcards and similar technologies, the payment card industry will evolve past the threats we face today to a time when we will render payment card data worthless to anyone wishing to commit fraud.
As with the magnetic stripe, smartcard technology represents the continuous evolution of the payments industry and is testament to our commitment to the innovation that has created one of the safest and most secure payment methods available.