...And With It, So Is ATM-Related Fraud
The traditional magnetic stripe-based cards are particularly vulnerable to criminals, and the study found excessive fraud rates at ATMs are threatening to stunt the expected growth of the industry-especially in regions such as Brazil, Mexico and Thailand.
Unless banks and retailers restore customer confidence, the ATM industry could witness a severe blow with growth rates significantly lower than anticipated, Frost & Sullivan said.
According to the research firm, the negative effect of ATM fraud is particularly evident in Brazil, where ATMs offer an advanced range of facilities to customers. Banks and financial institutions hesitate to invest heavily in ATMs unless the threat of fraud diminishes in that country, the report found. In the United States, the majority of off-premise ATMs are subjected to ram raids while skimming is the most prevalent form of fraud in Canada, the company noted.
To curb the threat, Frost & Sullivan reported that the card associations, such as Visa and MasterCard, are taking preventive measures to win back consumer confidence on ATM transactions. This includes setting deadlines for the industry participants to upgrade to 3-DES compliant machines from 2006. Further, ATM deployers are starting to put other complementary security features in place to reduce fraud, such as smoke canisters and dye markers.
For info: www.frost.com.