Card transactions lack security measures :RBI

Mumbai: A working group constitued by the Reserve Bank of India (RBI) to prepare to suggest measures for securing card transaction has found flaw in the way currently information flow between the acquiring host, issuer host and switch are encrypted. This exposes the payment infrastructure to possible data compromise through wire tapping and and it is critical to build adequate controls to safeguard customer and transaction information during the transaction life cycle, said the report. If magnetic stripe card and PIN is to be mandated for all point of sales (POS) transactions, then terminals will have to be modified to read the full service code on the card and prompt for PIN, suggested the report. `` If the service code on the card does not support PIN prompt, then terminals will have to be updated,’’ said the report. This has to be done by updating the application software loaded on the POS terminal. The first step prior to implementing additional controls and authentication would be strengthening the existing payment infrastructure by securing the technology infrastructure, improving fraud risk management practices across all stakeholders, and strengthening merchant sourcing process. Towards this, the some important technical and process changes for the industry to be made over the next 24 months, said the report: The industry size (defined as total credit and debit card spends value) is approximately R1,13,000 crores (includes ecommerce,IVR, MOTO transactions from Mar 2010 10 to Feb „2011. The total credit and debit card POS spends value is R88,000 crores. ATM cash withdrawals are R10,91,115 crores.  The number of debit cards is 24 crores and the number of credit cards is 1.8 crores. The total number of POS terminals is 5.6 lakhs and the number of ATMs is 70,000. The total industry lost and stolen and counterfeit card fraud is Rs. 13 crores. The fraud to sales ratio is approximately 1.4 basis points (bps). However, a trend in counterfeit card fraud is that counterfeiting typically happens when customers travel internationally. Over 99% of the total cards issued in India are magnetic stripe cards. Currently, few large issuing banks like Citibank, ICICI Bank, HDFC Bank and SBI are issuing EMV chip cards. These banks are issuing chip cards typically to customers who frequently travel internationally and to customers who have high credit limits. All these cards are used as chip and signature. None of the issuing banks have started issuing chip and pin cards.

FE