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ATMs have donned Superman capes and become the front line of defense against card fraud for one bank.
Banco de Credito e Inversiones of Chile says it has installed technology that enables ATMs to spot counterfeit cards. The bank claims the technology is so successful it has completely eliminated some types of fraud. The results surpassed the expectations of the vendor that developed the technology, which evaluates the physical properties of debit cards' magnetic stripes, bank officials say.
The antifraud method also is giving Banco de Credito e Inversiones new ammunition in its ongoing campaign against the shift to smart cards, a security format that already is widely used in much of the world but not in the United States or Chile. Financial companies in both countries have said that adopting the EMV Smart Card Standard would be onerous and expensive, and the Santiago -based banking company now claims that using MagTek Inc.'s MagnePrint technology is just as effective in stopping fraud.
The bank installed the technology on more than half of its nearly 1,000 ATMs, and on those machines, "we have zero fraud. Zero," Mario Gaete, its chief operating officer and chief information officer, said in an interview last week.terminals.
They can write this data can write this data to a blank card use it to access an ATM.
However, MagTek says the low-level magnetic noise emitted by individual magnetic stripes is as unique as DNA; its system can tell when the account data seem to be valid but written onto the wrong card.
Banco de Credito e Inversiones began testing the technology in 2006 and last month became the first MagTek customer to announce that it is using the technology in full production.
Tbe bank plans to install MagnePrint at the rest of its ATMs and is urging other Chilean banks to use it. It is also testing the technology at the point of sale at a local gas station.
Fifth Third Bancorp began evaluating the technology in the United States in February at about 1,000 point-of -sale terminals. The Cincinnati-based company's test is expected to run through this month. MagTek said another bank, which it would not name, also is in full production with MagnePrint.
Banco de Credito e Inversiones said it has spotted more than 1,000 attempts in the past eight months to use counterfeit cards at ATMs with MagnePrint.
After each incident, the bank evaluates images from security cameras and calls the customers to verify the transactions criminals initiated, not customers.
MagnePrint produces a score that determines the likelihood that a card is counterfeit, and though the Seal Beach, Calif.-based vendor says this score can vary depending on the card's age and other factors, Gaete says the difference in the score produced by a legitimate card and a fake one is stark.
MagnePrint is "the first technology that we can trust in terms of preventing and avoiding fraud skimming," Gaete said.
From these early results, Banco de Credito e Inversiones has concluded that MagnePrint could be an effective substitute for the EMV format.
Banks around the world are issuing EMV cards, are in the process of shifting to EMV, which requires financial companies to deliver cards that feature microchips. Merchants must install new readers to accept them, and consumers must enter a PIN to initiate transactions.
Some Chilean banks including BCI are opposed to EMV, Gaete said.
"We tested chip, but we are not convinced," he said. "One, because we don't believe that the chip is secure. Chip can be cracked. Also, the cost of chip technology, it's very expensive in comparison with MagnePrint." ATM
MagnePrint examines the unique traits of the iron particles in a card's mag-stripe. Fraudsters can obtain card data using skimming devices at ATMs or payment
