Money News
APACS, the UK payments association, is initiating a pilot scheme to beat Internet fraud.
The scheme - that will see banks issuing every customer with their own hand-held credit card reader - is aimed at combating so-called 'card not present' fraud, and designed to protect consumers when making purchases over the Internet, by telephone or mail order.
This form of fraud amounted to almost 50% of total plastic card fraud last year, according to new figures.
Under the pilot scheme banks will issue a card reader to each of their customers. When buying something remotely, consumers would then place their card into the reader and type in their PIN. The reader in turn would generate a one-off passcode, which would be communicated to the retailer to verify the transaction.
The scheme is expected to be rolled out later this year.
Meanwhile, one year on since the introduction of Chip and PIN technology in the UK, APACS says that more than 99.9% of all chip and PIN card transactions are now PIN-verified - confirming that very few card accepting businesses have not upgraded to chip and PIN.
More than 185 chip and PIN transactions take place every second. This compares with 125 every second a year ago.
Just in case you may have been on a desert island during the last 12 months Chip and PIN is the new, more secure way to pay with credit or debit cards. Instead of using your signature to verify payments, you are asked to enter a four-digit Personal Identification Number (PIN) known only to you.
The UK's banks and card companies have now issued 138 million chip and PIN cards - representing 97% of the nation's 142 million payment cards. This is eight million more than were in circulation six months ago and over 30 million more than eighteen months ago. In 2007, remaining cards will continue to be upgraded.
Elsewhere, online money transmission agency, PayPal, is rolling out an added layer of security for financial transactions.
The new layer of security - set to be made available in the UK by the end of the year - involves a $5 token, which generates a random, six-digit code every 30 seconds and which is then used as part of the login process for the website. Customers will also need to enter their user name and password as per usual.
PayPal has hopes that the token will defeat so-called 'phishing' attacks where dummy firms purporting to be from companies such as PayPal encourage users to follow links to a fake site and then enter a username and password.
14 February 2007 © Moneyextra.com
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