Banks are set to spend over R1-billion to introduce smart cards in order to curb fraud, Absa said on Monday.
”It is estimated that the change to issue smart cards will cost the industry in the region R1-billion.
”The time taken to roll-out to the total card base is based on the strategy of each issuer and if a general adoption is on natural replacement via re-issuing and replacement, it can take many years,” said Absa payment system’s general manager Walter Volker in a statement.
He said the cost of the cards were dependent on the type of card issued by the various banks. Smart cards, he said, would significantly reduce fraud losses through ”skimming”.
”It [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.
”The chip card, over and above the same data carried by the magnetic strip, also features dynamic offline risk parameters and processing logic to perform secure offline transactions.”
The main problem with smart cards, however, was educating merchants as well as customers on how to use them.
Absa introduced the smart card system in March 2007. – Sapa