ANZ boosts Eftpos security

Visa and ANZ Bank are attempting to ease the security concerns of merchants selling goods face-to-face using Eftpos with the Visa Smart Debit Credit scheme.

Visa and ANZ Bank are attempting to ease the security concerns of merchants selling goods face-to-face using Eftpos with the Visa Smart Debit Credit scheme.

The Visa-devised VSDC technology gives Eftpos users the added security of a chip, which should avoid the magnetic-stripe card’s vulnerability to “skimming” – fraudulent copying of the code on the stripe -- and offers an optional PIN code.

The move complements the “verified by Visa” internet security scheme, introduced last month, and the use of ANZ’s chip-equipped Zed Card. VSDC will be made available to Zed Card users before anyone else in New Zealand.

The “verified by Visa” scheme offers more secure purchases over the internet, protected by a user password used in conjunction with a PC equipped with a Zed Card reader, but this system only works with selected online merchants. However, prominent international online merchants are already signing up to the new scheme, says ANZ head of credit cards Julie-Anne Young. “Amazon is being signed up as we speak,” she said late last week.

VSDC approaches a potentially far larger merchant population, through being programmed into Eftpos terminals. New Zealand Eftpos buying works on a “PIN or signature” basis, she says, so there is a chance that a fraudster in possession of the card itself could imitate the legitimate cardholder’s signature and successfully make a purchase. Some banking and merchant lobbies are pushing for adoption of a strict “PIN only” procedure for Eftpos.

“Verified by Visa” also echoes back to the online user a phrase he/she has chosen in advance, offering assurance to the customer that it is the legitimate card issuer on the other end of the communication and the transaction has not been intercepted. The extra assurance offered by the VSDC and verified-by-Visa schemes also “reduces the chargeback potential to merchants”, Young says.

New Zealand merchants, notably Woolworths, last year complained that security on Eftpos debit and credit transactions has historically been comparatively low, resulting in the cost of fraudulent transactions being charged to the merchant.

Richard Harrison, e-commerce manager for Woolworths said last week that he had not heard of either ANZ scheme, “but this would be a breakthrough. It sounds like a very sensible approach, and I would certainly advocate it.”

Eftpos New Zealand, the ANZ subsidiary that claims 40% share of the Eftpos terminal market, has already started upgrading its merchant customers to eklick 710-16 terminals, the only VSDC-enabled terminals in the country, says ANZ.

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