Absa and Visa unveiled chip-enabled (chip and PIN) debit cards this morning, at an event held at the Hyde Park shopping centre. They claim this is the first local roll-out of the upgraded security-enabled cards.
Walter Volker, GM of Absa Group Payments Systems, says Absa has spent more than R100 million on the development of the infrastructure that will support these cards. He adds the bank will spend more on the implementation of the chip in the rest of Absa's cards.
"As the roll-out is dependent on all banks having their infrastructure - particularly terminals - in place, we decided on a gradual issuing of cards to our customers," Volker says.
Absa's Silver debit card customers started using the card four weeks ago.
Customers who already have accounts will be issued with chip and PIN cards when their old cards expire, are faulty, lost or stolen. Volker says Absa staff members have been using the chip and PIN card for four years in a testing phase.
Because of global legislation, most banks have upgraded their point-of-sale (POS) devices to enable the use of the chip card. "If a foreigner uses the magnetic strip on his or her credit card, and if a fraudulent transaction happens, the local [SA] bank is held liable for the transaction, not the issuing bank," says Volker.
He estimates that 120 000 chip-enabled POS devices are available to the South African consumer. Absa upgraded 33 000 of these devices.
Added features
Head of technology for Visa sub-Saharan Africa, Nick Essame, says globally, the Europay Mastercard Visa Integrated Chip Card Standard is being used or implemented in 100 markets across the world.
"Chip technology will offer greater convenience to consumers, provide added protection to merchants and enhance the South African payment card system," Essame says.
He adds that chip technology will enable several additional features, which include a choice of applications such as loyalty, access control, rewards, and public transit passes.
Visa says the biggest benefit for the consumer is the use of PINs at the POS, rather than a signature.
Volker says the magnetic strip on bank cards will not disappear immediately, and the new chip and PIN cards still have them. "This enables customers to use cards where the new technology is not in place."
If customers try to use the magnetic strip at a chip-enabled POS, the device will direct them to 'insert the card', forcing consumers to use a PIN, which the company believes will help prevent fraud.
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