The US’ PrivaSys has launched a new smart card aimed at reducing fraud.
San Francisco’s PrivaSys on Tuesday announced the launch of a smart card that aims to be the last word in the war against plastic card fraud. It includes a keypad, a small LCD screen showing the cardholder’s photograph, a battery, a special magnetic strip and a processor chip. To use the card, the cardholder types in a PIN number to generate a unique number for that sale. The card can then be swiped through any card-reading device.
The UK has the highest plastic card fraud rates in Western Europe: figures from bank association APACS show that in 2000 card fraud cost the UK GBP292.6 million, 55% up on 1999. Given this worrying situation, new weapons in the war against card fraudsters are always needed. Yet while the thinking behind the PrivaSys offering is highly sophisticated, it is doubtful that the UK is a good target market for this particular product.
For a start, it would need the backing of the card schemes and issuers. At present, both are busy developing their own weapons for the fraud war. They want to meet the 2005 deadline for the transition to chip-based cards and PIN at point of sale. A magnetic swipe card, however sophisticated, does not fit in with these plans.
The card would also need consumer acceptance. Given its technologically advanced nature, it may be too complex to gain this – especially in light of the massive education programs that card issuers and schemes say will be necessary to just inform consumers about chip and PIN.
The PrivaSys card is a clever idea, but is unlikely to succeed in the present UK market. The magnetic strip technology is too outmoded to satisfy the issuers, but the rest of the design is too far ahead to satisfy consumers. A similar card with a chip and a post-2005 launch date might stand a better chance of success.
