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An Effort To Eradicate Card-Not-Present Fraud
Doug Caverly
Staff Writer
2006-08-17
 Insider Reports RSS Feed
APACS, a banking industry entity, wants to solve card-not-present fraud. The UK payments association is in the early stages of planning a solution - it still hasn't settled on one (or more than one) approach - but an effort is underway. Gridsure, a personal authentication system, is one product up for consideration.
Card-not-present fraud is fairly self-defining, but to ensure that we're all on the same page, an explanation couldn't hurt. According to the BBC, it "occurs when neither the card nor its holder is present at the point-of-sale, as happens in telephone, fax, mail order and internet transactions."
An APACS spokeswoman told Early Warning, "Card-not-present fraud is the fastest rising type of fraud. We would be daft not to consider solutions, and there are a few under review at the moment." The Early Warning article revealed that this type of fraud "increased 21 per cent last year, costing banks £183m, and Apacs says the figure will be higher this year."
Chip and PIN technology is a current favorite in combating card-not-present fraud. APACS recently released a report stating that "the UK's banks and card companies have now issued 130 million chip and PIN cards representing 92% of a total of 141 million cards." It also boasted that "more than 99.8% of all chip and PIN card transactions are now PIN-verified."
Early Warning spoke to Richard Weber, the director of Cambridge University's statistical laboratory, who believes "the Gridsure system . . . could ultimately replace chip-and-PIN."
"The systems in existence already [that generate one-time PIN] mean carrying around a list of numbers, having numbers sent to your mobile phone or carrying some kind of electronic device," Weber said. "This system purely works on the fact that you have remembered something and it is absolutely viable that it can replace chip-and-PIN."
What might this mean for consumers? Credit cards would become simpler and safer. That's always a good thing.
Tag: Card-not-present fraud
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About the Author:
Doug is a staff writer for SecurityProNews, InternetFinancialNews, SearchNewz, and WebProNews.
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