July 6, 2005
Moneris Solutions have developed a new credit card authentication
solution that requires a PIN (personal identification number) to access
the secure system. The new POS (point-of-sale) solution replaces
older signature-based credit card authentication with a simple PIN.
According to the company, people can’t forge credit card signatures
with this new system.
According to Kevin Tait, spokesperson for Moneris, which prepares
merchants for credit and debit card transactions, chip cards are more
secure than traditional, magnetic-stripe chargers.
The PIN on a chip
card precludes signature-forgeries and whereas it’s relatively easy
for thieves to reproduce the information on a mag-stripe and get into
a consumer’s line of credit, it’s much more difficult to do the same
with chip cards.
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“The key thing is to achieve critical mass,” Tait said, noting a
lesson Canadian financial handlers took from Europe, where chip cards
have been in the wild for a while.
“The merchants are apt to say,
‘I don’t want to change because I’m not going to see any cards.’ On
the consumer side it’s, ‘I don’t want to deal with a chip card because
no merchants accept it.’”
Moneris, the first Canadian acquirer to provide chip card POS
equipment, is working alongside Visa Canada and card issuers like
banks to ensure all sides move with a single stroke.
Tait said Visa
expects most of its cards will be chip-enhanced by 2010, but the
initial chip cards will also sport mag stripes, and POS systems will
be able to accept both chip cards and mag-stripe cards so neither the
consumer nor the merchant gets too far ahead of the other side’s
He said merchants that purchase their POS equipment would have to
buy new gear to get ready for the chip future, but since most of
Moneris’s 350,000 merchant-partners rent POS terminals, hardware and
software from the acquirer, they’ll need not fork out extra dough
for the upgrade.
Moneris will take care of the cost, and the equipment should be no more expensive to rent than is common POS kit.
Tait said chip cards would likely grow to become something more than credit hooks. They might include technology that allows the consumer to apply a cash value to the card, which the carrier can use for “micro-payments” at parking metres and such. Loyalty programs could also tie into the chip card.
Tait said the chip card infrastructure is just getting started in this country. “The good news from the merchant’s point of view is because we have this five-year rollout period, you can almost replace the equipment by attrition.”
To be sure, CreArtive is ahead of the curve. “The machine’s ready but only a few [people] have the card,” Dayman said. “It won’t be for a while” that the majority of her customers tote the new kind of plastic.
Source: IT World Canada
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