Chip Credit Cards Not Needed Yet

[george]

Chip cards ‘not needed yet’

BANGKOK: -- The incidence of credit-card fraud in Thailand is still not serious enough to justify a change from magnetic stripe technology to expensive chip cards, a central bank source said yesterday.

Responding to a report of increasing credit card fraud, the source said commercial banks would need to invest billions of baht to change to chip-based plastic cards. They had to consider whether the security to be found in chip-based cards was worth the investment.

“Without chip cards, there is less security. But current policies are dealing with the problem, and they [the banks] have to consider whether the expense of the chip cards is justified,” the source said, adding that the central bank had warned consumers about credit-card fraud.

Recent reports have suggested that a Malaysian criminal group specialising in credit-card fraud has joined counterparts in Thailand to boost their operations here.

Malaysia recently implemented a chip-based plastic card system, investing as much as Bt6.6 billion to reduce fraudulent transactions there. As a consequence, speculation suggests the fraudulent operators have moved to Thailand.

In the first quarter of this year, credit-card fraud in Thailand amounted to Bt90 million, prompting the central bank to forecast that the figure for the whole year would surpass last year’s Bt250 million. In 2003, credit-card fraud in Thailand accounted for only about Bt40 million.

The central bank source said that eventually banks would be forced to introduce a chip-based system. They would have to fund the new technology themselves, as the central bank would not help.

“Eventually, Thailand’s credit-card industry will use a chip-based system. The question is when,” he said.

Meanwhile, the central bank source confirmed that the Bank of Thailand’s recent move requiring personal loan providers to have a minimum registered capital of Bt50 million was aimed at ensuring the financial stability of such businesses.

He gave as an example the case of a Malaysian “e-money” operator that gathered money from customers, then shut down its business.

“Doing this business, loan providers must have a systematic operation,” he said.

Samart Buranawatanachoke, senior director of the central bank, said most personal-loan providers in Thailand had registered capital exceeding the minimum requirement.

However, personal-loan providers would not need to maintain a capital adequacy ratio, like banks, because they did not accept deposits from customers, but sought funding from other sources.

The controlling measures on personal-loan providers are awaiting final approval from the Finance Ministry, he said.

--The Nation 2005-05-31

[samran]

I recently had my UK Chip and PIN credit card copied while I wasn't looking. I can't see the benefit of it either unless all outlets are equipped with an EFTPOS/PIN machine at all stores.

[johng]

I recently had my UK Chip and PIN credit card copied while I wasn't looking

Please elaborate.... how did they do that while you wheren't looking ?????

[Bangkokbutcher]

I think that samran is trying to say that even though the new technology is with us, it aint worth a w**k until all retailers are using the EFTPOS/PIN readers in the shops. So the card can still be copied and used elsewhere as long as the retailer dont need a pin...

[samran]

I recently had my UK Chip and PIN credit card copied while I wasn't looking

Please elaborate.... how did they do that while you wheren't looking ?????

<{POST_SNAPBACK}>

I am usually pretty good with preventing people from getting hold of my CC number. I make sure that I destroy all my receipts and anything else related to my card. But, they are pretty tricky.

I was caught out when I was at a petrol station near the seaside, and handed over my card to pay for my petrol.....look down at the counter, mmmmm chocolate.....I'll have a Snickers too please....

Attention was off my card for about 5 seconds, which is all it takes for them to copy the magnetic strip. There was no PIN facility. I had to sign for it.

A week later, the bank is calling me asking if I am currently purchasing a couple of hundered quid of computer equipment.

I think that samran is trying to say that even though the new technology is with us, it aint worth a w**k until all retailers are using the EFTPOS/PIN readers in the shops. So the card can still be copied and used elsewhere as long as the retailer dont need a pin...

Yes, and this was my point..

[spog]

I think that samran is trying to say that even though the new technology is with us, it aint worth a w**k until all retailers are using the EFTPOS/PIN readers in the shops. So the card can still be copied and used elsewhere as long as the retailer dont need a pin...

<{POST_SNAPBACK}>

As you say, the problem is, you can't just change from magstripe to chip overnight. So you are going to be in the situation where the uncrackable chips are on the same cards as the easily-copied magstripes.

But eventually, the magstripes will disappear. Give it a few months and I will be wiping my magstripes so that only the chip is accessible.

[mnoorsapl]

Chip cards ‘not needed yet’

“Eventually, Thailand’s credit-card industry will use a chip-based system. The question is when,” he said.

--The Nation 2005-05-31

<{POST_SNAPBACK}>

Eventually customers have to pay for the subscriptions, nothin' for free

[grahamb]

I remember reading on here that Thai credit card companies aren't liable for any losses in these types of fraud cases (apparently it's in the small print).

Could this be the reason why they are not interested in the investments for chip & PIN?