R1 billion to fight card fraudsters

Lihle Z Mtshali

Lihle Z Mtshali

Local banks will spend more than R1billion in the rollout of smart technology to counter card fraud over the next four to five years.

Walter Volker, Absa's payment systems general manager, said: "It is estimated that the change to issue smart cards will cost the industry in the region of R1 billion." He said the estimates were based on what Absa had already spent since the start of the project in 2000.

Absa introduced its smart debit cards in March this year, while Standard Bank launched credit cards with the secure chip last month.

Volker said the pace of issuing smart cards would accelerate as the three-phase process of getting the industry ready for the smart cards was nearing completion.

The industry is now at the third and last phase, with the first stage of upgrading core systems and the second, of upgrading bank branch terminals and points of sales, having been completed.

Volker said the smart cards would not completely eliminate fraud, but were expected to significantly reduce counterfeit fraud, or skimming.

This was the most common type of fraud, where criminals copied information from the card's magnetic strip.

"The smart card is highly secure as the chip has the ability to store information in such a way that it is virtually impossible to gain access to information that will allow fraudsters to reproduce cards and do transactions," said Volker.