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In view of the rampant rise in credit card frauds, banks and merchant establishments are upgrading their security measures to make electronic payment transactions more secure.
Among the big credit card players, HDFC Bank and ICICI Bank have started issuing chip-based EMV (Europay, MasterCard and Visa) cards.
Further, they are also employing real time fraud control tools such as second factor authentication and sending SMS and email alerts regarding card-based transactions.
This comes even as the Reserve Bank of India on Thursday issued guidelines for card issuers to only issue cards with an embedded chip and a compulsory pin (like that used for ATM transactions) from July.
Skimming, phishing
Aditya Puri, Managing Director, HDFC Bank, recently said that frauds such as skimming and phishing are an industry-wide phenomenon and, being a part of the ecosystem, the bank has also witnessed such instances.
Skimming is the illegal copying of information from the magnetic strip of a credit card. Phishing refers to emails or SMSes that trick people into giving out their personal and banking information.
“We are replacing PoS (Point of Sale) machines at some merchants where skimming has happened,” said Parag Rao, Senior Executive Vice-President, HDFC Bank.
HDFC Bank currently has about 2.5 lakh PoS terminals across the country and is one of the largest players in the merchant acquisition space as well. Rao, however, did not share information pertaining to the number of fraud cases detected.
HDFC Bank has over 6.4 million credit cards in circulation with an outstanding portfolio of Rs 10,000 crore and 35 per cent market share.
ICICI Bank has been issuing chip-enabled cards to all its new Visa and MasterCard customers for the past few months. “Our bank is also giving existing cardholders an option to convert their magnetic cards to chip-based cards when they are due for renewal or can request the bank for replacement,” said a bank spokesperson.
ICICI Bank, the second largest credit card player, has about 2.8 million credit cards with a market share of about 15 per cent as on December 2012.
Uttam Nayak, Visa Group Country Manager, India & South Asia, said: “About 10-12 banks are currently issuing EMV cards. Phishing has caused the majority of the frauds in the past few months. Hence, banks are also compelled to innovate and upgrade their systems. Getting EMV terminals and using only encrypted data are the global practices that we are promoting now.”
Calling UP customers
Banks are also proactively calling up customers, when they return home from high risk countries, to replace their existing cards with chip-enabled cards to prevent any misuse.
Jean Pascal Duvet, Chief Executive Officer, Atos Worldline India, said there has been about 40 per cent rise in the number of fraud incidents in the last one year and the trend is expected to continue.” Atos Worldline is an end-to-end service provider for critical electronic transactions.
Credit card company American Express last week launched a service ‘ezeClick’ which will enable its customers to complete online transactions without entering card details, thereby simplifying the transaction process with just a single user ID.
Start-up firm OneAssist Consumer Solutions is providing a 24x7 helpline whereby customers can block their cards and mobiles instantly.
“If you lose your wallet that has all your cards, one phone call to us will help you block all further transactions. Further, customers can also recover all data, including pin numbers, stored in their lost mobile phone,” said Gagan Maini, Co-founder and Director, OneAssist, which has also tied-up with HDFC Bank.
Most vulnerable
According to a KPMG report on frauds, financial services were the most vulnerable to frauds. About 37 per cent of organisations identified password sharing as the primary cause for identity theft.
A common type of identity theft involves creating clones of original Web sites that are then used to attack payments and online credit card processing systems to launder money.
Proactively, banks and merchants are also focusing on consumer education. Customers are being advised against sharing card details, storing pin numbers or passwords in wallets or phones, and setting simple passwords. They must also change passwords and pin numbers regularly and avoid using public devices like those in cyber cafes.
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