JB GUPTA

Since I am also a retiree from a financial institution, I find post retirement life a little sort of wasting of the valuable time in sitting idle, meeting friends and wasting their time and sometimes finding […]

Let us join the NGO in the name of awake and get awakened (Jago te Jagao) set up at Rajpura distt Patiala (Pb). The very purpose of this NGO is to instill a sense of awakening in the people regarding their duties […]

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Today when the interest rates have fallen from 14% in nineties to just 8% per annum coupled with falling value of rupee and skyrocketing inflation the public is in dilemma as to where to invest their hard earned […]

In European countries the banks issue chip-based smart credit cards to their customers as it is difficult to clone such cards. The encrypted account information is stored and embedded deep into the microchip in addition to magnetic strip on the card. The smart cards with microchips can not be used at POS as every time you will have to authorize the transaction with PIN code. Cards without the duo PIN and CHIP technology could be swiped at the POS without getting noticed or fraudulent people could clone the by reading the data from magnetic strip alone through gadgets available in the grey market. Now even if you card is cloned by such unscrupulous elements the transaction will require PIN number, exclusively known to you only, to get the transaction authorized.
Taking a clue from other developed countries, the RBI has also made it mandatory to replace the old, fraud prone, easy to hack magnetic stripe cards to better secured PIN and chip technology.
It is a matter of discussion amongst consumers, retailers, banks as to who shall bear the loss due to credit card frauds. If retailers and bankers do not share the liability then the consumers will shy away from creating transactions with their credit cards as the consumers will not rely upon payment system solutions. It is possible only if the banks and retailers shift to PIN and CHIP technology which is likely to increase the costs of the smart cards to the banks to oblige their existing credit card holders by replacing their old cards with the PIN and Chip technology supported cards. Not only banks but retailers using POS terminals will also require getting the machines upgraded which can read the micro chip on the cards. These additional costs are necessary so as to protect the millions of consumers from whom both the Banking and Retail industry is drawing their profits. They can not afford their consumer in high and dry condition and at the mercy of criminals.
Almost all the card with the logo of MasterCard, Visa and American express or even Discover have now been shifted to PIN and Chip Technology in a phased manner and if the retailers do not get their POS payment terminals upgraded immediately to read smart cards, they are likely to loose their consumers. The retailers will have to put up clear cut signboards that they accept Smart Cards with PIN and Chip Technology.
No doubt smart cards will help in reducing credit card frauds at the point of purchase or point of sales but even the PIN and Chip technology will not eliminate the chances of frauds as account number of the consumer can still be used to purchase online or on mobile purchases where the card is not required to be presented. In the future there may be development of technologies to even to block the credit card frauds through online or mobile purchases.
Opinion of the Author:
To reduce the incidence and quantum of losses due to credit card frauds the issuer bankers need to take the following steps:

Within the overall Credit Limit of the Credit Card, the consumer be allowed sub limit per transaction while using the credit cards at POS or POP terminals.
For every transaction above the minimum sub limit let the consumer receive the OTP, one time password or PIN on his smart phone to go ahead with the transaction above the sub limit during one session.
Even consumers are deceiving the credit card issuers by converting their transactions in to cash from POS owners. The consumer will go to just say 10 petrol pumps in the close vicinity and after making transactions at every POS the consumer will get it converted to cash as POS owner will also like to do away with the heavy cash so as to avoid visiting their bankers. The smart consumer will use the credit for minimum say 45 days and go on repaying and cashing time and again to use the full credit card limit for conversion into cash at free of interest cost.

Know more about Credit Card utilities and importance of CVV as CVV number can facilitate online and mobile credit card frauds even if the card is with PIN and CHIP technology. Smart Cards eliminate chances only at POS terminals.

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Acid attacks on girls, in the recent past in India, became a revenge fashion for the estranged lovers and the apex court had to intervene to stop immediate sale of Acid throughout the Indian Union. I do not know […]