WINDHOEK – All commercial banks in Namibia are required to introduce ‘clone proof’ bankcards by 2015 to stem the tide of illegal cloning, which is taking place at an alarming rate in the country.
Card cloning has become a serious concern for both banks and consumers with regular warnings sent out, sometimes several times in a month, to warn the public of the dangers of this illicit practice. The new cards, known as Europay, Mastercard and Visa (EMV) chip cards, represent a move away from the typical static magnetic stripes cards to the new cards, which contain an embedded microchip. The new cards have the added benefit of reducing the use of stolen payment card data. If data were compromised, a counterfeit card would be unusable without the presence of the card’s unique elements. “The new EMV chip and a pin card is an initiative the banking industry introduced and which helps to address the problem of card cloning. This requires the banking industry to issue EMV chip and PIN cards by 2015. Some banks have already begun to issue these cards”, explained the Bank of Namibia’s Director for Strategic Communications and Financial Sector Development, Ndangi Katoma. First National Bank Namibia (FNB) last week announced the introduction of the new chip and PIN card, emphasizing that an embedded microchip has been added to the bankcard and customers will only be able to use their card with a PIN (Personal Identification Number).
Ian Leyenaar, the Chief Executive Officer of FNB Namibia, said: “The card holds the same data, but it has a chip, which makes the card more secure. Instead of swiping the card and signing the slip, cards will be ‘dipped’ and customers will be required to enter their pin code.” Leyenaar went on to say that the new cards cannot be cloned. “That is why the card is ‘dipped’ into the machine and not swiped anymore. When a customer wishes to pay for goods using this system, the card would be placed (dipped) into a ‘PIN Pad’ terminal, which accesses the chip on the card. Once the card has been verified as authentic, the customer enters a 4-digit PIN, which is submitted to the chip on the smart card. If the two match, the chip signals the terminal that the PIN was correct, otherwise it informs it that the PIN was incorrect,” he explained. He advised that customers would be able to see PIN OK or PIN approved immediately and would not have to wait for a slip any longer. Leyenaar further said the Point-of-Sale machines of all banks have been tested and are compatible with the new chip and PIN cards of FNB Namibia.
Ryan Geyser who is the Senior Manager: Product/Channel Development and E-Channel Processing at Bank Windhoek, told New Era that the bank has initiated the project to begin issuing chip cards to customers, however, he said it is a long and complex project. “Bank Windhoek has embarked on a number of initiatives to increase the security of card transactions, and we continue to do so to ensure the best value is provided to our customers,” said Geyser.
He added that Bank Windhoek will comply with the 2015 deadline well in advance, but also added that the new technology protects not only against the risk of cloning, but of other types of card and electronic fraud as well. Meanwhile, Standard Bank Namibia says it is currently in the process of introducing this initiative on its credit cards. “As part of an ongoing process this means that all our credit cards issued going forward will be chip cards. Customers whose credit cards expire will be given the new chip cards,” said Standard Bank’s Communications Manager, Surihe Gaomas-Guchu.
According to Katoma the implementation of the new cards is being driven by the Payment Association of Namibia (PAN), which promotes a co-operative environment to drive payment system policy development and self-regulation. PAN was established in 2005 as a not-for-profit association and is mandated to manage the national payments system, to organise and establish technical standards and to regulate the participation of its members in the national payments system. PAN also has public policy objectives, which include providing the Namibian banking industry with safe and efficient facilities to exchange payments, as well as to protect the integrity of the National Payments System.
The members of the association includes Bank Windhoek, the Bank of Namibia, FNB Namibia, Standard Bank Namibia, and Nedbank Namibia. All members are represented in the PAN Management Council, which is the highest decision-making body for the Payments Association of Namibia.
By Edgar Brandt