The head of the Australian Federal Police has told banks in the country that the use of magnetic strip and signature system is past its sell by date, and delays in implementing new technology is leaving consumers vulnerable to fraud.
AFP Commissioner Mick Keelty made the comments at a card summit in Sydney, telling financial institutions that it was time to change the way financial transactions are carried out.
Research shows the reduction of credit card fraud in Asia as result of the chip enabled smart cards, said Mr Keelty. If we look at credit cards – there has been a positive reduction in fraud with the introduction of chip technology in some Asian countries.
The magnetic strip has outlived its day and is so easily copied and so easily defrauded that it is old technology, he added.
Mr Keelty said that the introduction of chip and PIN technology in Malaysia has resulted in an 80% drop in counterfeit credit card fraud in the country. The introduction of chip and PIN in the UK has also reduced fraud, according to industry body APACS.