BNZ card technology reduces fraud

Number-changing programme has reduced dodgy transactions by half, bank says.

The Bank of New Zealand says its Liquid Encryption Number (LEN) technology for preventing credit card fraud has been a success since it was first trialled on a limited basis in 2008, with the rate of fraudulent transactions from cloned credit cards in New Zealand down by 50 per cent. It is now in place in all BNZ credit and debit cards. The technology works by changing numbers on cards’ magnetic strips every time a transaction takes place, or an account balance is requested at an ATM.

This makes it easy to pinpoint when a cloned card was used, as the number on the cloned card transaction will be an outdated one, not the current one on the real card.

In an event publicising the LEN initiative this morning, BNZ CIO Peter Yarrington noted that it is a world first, and that the BNZ has secured global patents for several aspects of the technology.

“This is a New Zealand innovation, and we are in the process of extending it into Australia,” he said.

(The BNZ is owned by the National Australia Bank).

The technology was added to existing cards, meaning news ones didn’t need to be issued, and enabling it for ATMs was a simple matter of upgrading the ATM operating system, Yarrington said.

At today’s briefing, he said New Zealand BNZ card holders travelling overseas should get an ATM balance

before they leave, then get one soon after arriving home, so as to be able to prove any fraudulent transactions made on a clone of their card are identifiable.

The LEN technology was invented by BNZ fraud initiatives manager Michael Turner. Computerworld NZ

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