PIN Only Credit Cards
Friday 1 August 2014 @ 11.55 a.m. | Corporate & Regulatory | Trade & Commerce
For those who may have missed it, from today (1 August 2014) the Personal Identification Number (the PIN) has become the main form of debit and credit card payment authorisation in Australia. As the PINwise website indicates the change is an initiative of the Australian payments card industry to encourage the use of PIN instead of signature because the view of the industry is that using your PIN for credit and debit card purchases at point of sale (POS) is safer and faster than signing.
The change is being made for security reasons and according to the PINwise website "there is only a one in ten thousand chance of someone guessing your PIN". The change it is reported by the ABC is one which the industry says "could stamp out $60 million in face-to-face credit card fraud".
Background
The change is described as an "industry-wide move to expand PIN at the POS and phase-out the signature as a form of verification on Australian credit and debit cards".
The change to PIN only is to take place over a short transition period from 1 August 2014. The aim is said to be to "make Australia’s payment system even safer". As part of the initiative the nation’s merchants (said to represent some 800,000 merchant payment terminals) will undergo software updating so as to no longer accept signature as the main form of card authorisation for Australian cardholders.
The change does not affect "contactless or online transactions" (for example, online purchases) and further, only in some circumstances, for example, when using a card issued from a bank overseas, will signature still be a valid form of verification.
How is Face to Face Credit Fraud Reduced
The ABC quotes Asha Rao, Associate Professor of information security at RMIT, on this who says:
"With signatures you're relying on humans to check your signature; with the PINs it is an automated process which is the whole idea, . . .".
This Ms Rao indicates will prevent the skimming and forging signatures or even the stealing of cards and forging of signatures. Automated system are said to be more secure because humans are not directly involved in the security features and humans are usually the weakest part of the security.
Concerns and Reactions
One of the areas of concern reported by the ABC is with respect to older people and people with disabilities, for example, the cases of someone with Alzheimer's disease or similar memory condition being forced to pay because they are unable to remember their PIN. The ABC quotes the convenor of the National Network of Adult and Adolescent Children who have a Mentally Ill Parent (NNAAMI), Mr Mckillop, who says that he has been calling on banks over the past months to find out what plans they have for people who will not adapt to the change:
"There's no pamphlets, no publicity, no information for older people or people with disabilities, not even general information in the community about that measure."
Generally retailers are reported as welcoming the change although the ABC reports concerns in the restaurant and catering industries where it indicates that the Restaurant and Catering Association of Australia feels hospitality businesses will be hit with extra costs because extra EFTPOS terminals will be needed to cope with the change. There is also the concern among some restaurant proprietors that the move away from signatures will lead to fewer tips.
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