Of interest at last week’s joint Smart Card Alliance and CTST security conference, hosted by SourceMedia (owner of Bank Technology News) was an update about a mass movement of Latin and South American institutions toward smart cards using the global EMV standard. One of the spurs appears to be the liability standard adopted three years ago that shift responsibility for fraud losses between issuers or acquirers, depending on which end failed on the EMV loop.
The intra-regional rule that tie losses to an acquirer with a non-chip enabled terminal, or an issuer whose card is swiped on an EMV-equipped terminal, will soon be adopted for similar domestic “liability shift” rules within Mexico, Brazil and Venezuela over the next year, according to MasterCard vp Kim Hangoc. Hangoc says banks in Brazil are in the midst of a mass deployment, mainly motivated by card fraud increases that Banco Real ABN Amro executive Mario Mello pinned at 43.5 percent annually between 2004 and 2006.
EMV issuance has helped curb those numbers, and actually improved customer convenience in instances of skimming. Mello points out that his smart card customers can continue using their compromised cards while waiting for a replacement, since the bank’s back-office fraud detection can isolate the chip-based transactions from those stemming from stolen mag-stripe data. That sounds like a security feature U.S. issuers of contactless cards—many of whom were in attendance at the conference—should consider promoting to lessen consumer insecurity over proximity payments.
