March 24, 2010
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News: New Zealand Visa Goes Chipped.
New Zealand's traditional credit card with the customer's signature on the back so that retailers are able to verify identity, will soon be a thing of the past if Visa has anything to say about it. Visa intends to provide all of its newly issued credit cards with a new chipped card beginning next month. The company predicts that the end of 2012, Visa customers will no longer be required to sign transactions receipts. According to a company representative, all existing Visa credit card holders will receive the new chipped card within a four year period. Rather than signing for card transactions, cardholders will be required to enter a personal identification number (PIN) to verify identity. The requirement to enter a PIN number will be mandatory for all cardholders, both chipped and magnetic strips, as of April 2012.
Visa says the new chipped card was developed in response to an increased growing need of security due to a 20 percent increase in credit card fraud over the past few years. According to resources at the company, the greatest increase in fraud has occurred over the internet during online purchases. The new chip and pin credit card is said to provide the highest level of security in the world. According to Ian McKindley of Visa's Risk Management division, the chip is criminal proof.
The chip does not come without expense to retailers. It requires a special payment processing terminal that will need to be installed at the expense of the retailer. All retailers will be required to have the new terminal installed prior to the Rubgy World Cup which takes place July 2011. The good news is that nearly 80 percent of the retailers already have the required terminals installed which use the same technology as the contact-less credit card system that was introduced last year. These new terminals also have the capabilities of storing customer loyalty schemes as well. Online retailers will also be required to obtain the three digit security code on the back of the card as well as the account number and expiration date. The chipped cards are already in use in Britain and is said to have decreased fraud by 35 percent over the past two years.