Visa will move to chip and PIN technology for all Australian Visa cards over the next four years.
By 2013, signatures will no longer be accepted at the checkout as part of a wide-ranging agenda to cut card fraud.
Visa’s GM for Australia and New Zealand, Chris Clark, said it was working with financial institutions and retailers to upgrade more than 14 million Visa cards in Australia, half a million merchant point of sale terminals and thousands of ATMs to chip and PIN technology.
“From January 2010, all new Visa credit cards issued in Australia will feature secure embedded smart chips to give Australians a higher level of confidence in the security of their transactions. “This will be followed by the upgrade of Visa debit and reloadable prepaid cards from January 2011,” Clark said.
“Chip technology will also offer banks and merchants the ability to provide their customers with benefits such as faster transactions, innovations such as contactless payments and the opportunity to store information such as reward programs on their cards.”
Clark said the move to chip and PIN was part of a comprehensive seven-point security agenda that also includes initiatives to enhance the security of online transactions. Cardholders will be
enabled to use a Verified by Visa password when shopping over the internet.
Online retailers will be required to capture the three-digit cardholder verification number when processing transactions, while small and medium sized businesses will be required to enhance their levels of data security.
“These initiatives are part of a comprehensive security upgrade aimed at providing cardholders with a higher level of confidence and significantly reducing all types of card fraud including
counterfeit, skimming and online fraud.
“While card fraud in Australia remains low by world standards, overseas criminals are becoming increasingly active in seeking out new arenas. The time is right to take advantage of the new
technologies available to work across the industry, with banks and merchants, to strengthen security across the board,” Clark said.
Additionally, card issuers must enrol all Visa cards for Verified by Visa, a free service for cardholders that provides a password for secure online shopping, by April 1 2012 and all merchants who take online, telephone and mail order transactions must check the three digit card verification code from January 1 2011
Currently about 37 per cent of Visa cards issued in Australia are chip-enabled. Chip cards used with PINs have proven to be effective in reducing counterfeit card fraud overseas. The UK
introduced compulsory chip and PIN in 2006, resulting in fraud losses at UK retailers falling by 35 per cent between 2005 and 2008.
“The migration from signature to PIN will allow us to take full advantage of the protection provided by chip card technology,”