New chip and pin innovation set to eradicate internet fraud

Commenting on the anniversary of chip and PIN, Robert Kenley, head of credit cards at moneysupermarket.com, said: “A year on, chip and PIN has made a significant impact on reducing card fraud, indeed, figures show that total card fraud is down by five per cent. However people are set to benefit from pioneering technology that will utilise chip and PIN to safeguard them from fraud when making ‘remote’ purchases i.e. buying goods over the internet, the phone and mail order. If it comes to fruition this innovation will not only protect consumers, but also revolutionise the payment card market.

“Fraudulent activity through these ‘remote’ transactions, otherwise known as card-not-present or CNP, cost the UK £95.3 million in the first six months of 2006 – making it the single largest form of plastic card fraud. The proposed solution, set to combat this, would see banks issuing a card reader to each customer. When someone wants to purchase something remotely, they would simply place their card into the reader and type in their pin. The card reader would then generate a one off pass code which would be communicated to the retailer to verify the transaction.

“These developments are still in initial trials and it will be interesting to see who will be the first to come on board. In the meantime, with more people shopping online, customers would be well advised to make sure they keep card details as secure as possible by transacting over secure sites which are protected by Verified by Visa and MasterCard SecureCode. It is also advised that a credit card is used for internet purchases as customers are normally not liable if any fraudulent activity takes place.”