Behind The Investment News

Another Number To Remember
by Stephen Rake, 18/01/2006
Source: The Australian Financial Review 08/01/2007

One of the greatest fears of credit card holders is that the card and its associated information fall into the wrong hands.  The result being a credit card debt for someone else’s purchases.

In a move to reduce the chances of fraud in the credit card world, Australian customers will be able to choose to use a personal PIN rather than their signature by early next year. Another bonus from this approach will be an improvement in processing times.

A parliamentary committee last July recommended the industry implement PIN based authorizations for credit cards and consider the adoption of chip technology.  Countries such as Britain and France have already replaced signatures with PINs to limit fraud.

Both Visa International and MasterCard Worldwide have backed the move, stating the technology was available and that most merchant terminals could now read PINs.

MasterCard Worldwide executive vice-president, Australasia, Leigh Chapman is quoted as saying, “It’s a good advance for the reduction of fraud perspective and it should be very beneficial to the industry.”

This move also follows other reforms in the industry with the Reserve Bank of Australia slashing a range of hidden interchange fees in an effort to promote transparency and competition.  The RBA is planning to review its reforms later this year.