Irish banks clueless about chip cards

zz03

There was a representative of the bank payment card "gang" interviewed on RTE Radio 1 about chip cards this morning. Having listened to the interview one wonders if they (the Irish banks) really understand how they (smart cards) operate?

He kept harping on about how Great Britain was ahead of the game in the implementation of chip cards when in fact as most observers know they have gone the wrong way about it and are 20 years behind the Continent where PINs and chip cards have been in regular use at the point of sale. While the British banks have spent millions over the past three or four years issuing chip cards to their cardholders few if any retail shops have been equipped to use the chip function. i.e. the chip is totally wasted because the retailers there continue to swipe the magnetic stripe as they do in the USA. Fraud continues to skyrocket as a result.

He neglected to mention the main benefit of the chip card when properly implemented – ie if one is stolen it automatically “switches itself off”. The thief has three chances to guess the PIN (a 4 to 6 digit number). As with a mobile phone, three wrong attempts and the card is blocked, making it useless at the point of sale.

A key requirement is a law or regulatory regime to force retailers to process card transactions from nationally issued cards via the PIN and chip reading route. When all debit and credit cards in a country have been issued in smart card form, a retailer should no longer be able to use the magnetic stripe function or manually key the card number. Many retailers updated their point of sale systems for the Euro introduction. The logical route would have been to move to chip cards at that point. They will again have to again change some of their equipment if / when the dozy Irish banks start to move to smart cards – some of which equipment will be only a year or two old!

He stated during the interview that the magnetic stripe would be phased out from the card within a few years. France has had chip cards for about 25 years and these cards still retain a magnetic stripe (a) to support high speed low value transactions such as motorway toll payment and (b) to provide compatibility with card processing systems in countries that haven’t yet upgraded their card systems. If Ireland has chip only cards, the entire motorway network (if it ever gets built) would be gridlocked if cardholders had to use a chip card to pay tolls which take about 5 seconds to authenticate compared with a quick in/out of a mag stripe in a toll booth which takes about 500ms.

It seems to me that the secret PIN should also be used for online shopping – not the dumb American 3 digit security code printed on the back of the card (used by AIB and BoI etc) – which will also be available to the card thief.

And as far as telephone and mail orders are concerned, the cardholder’s postcode should be obtained and verified with the card billing address – making it difficult for someone who steals a card or card number to use it for mail order. This of course assumes that the country in question has got around to implementing a postcode system. The only two areas of the world that spring to mind that haven’t are Ireland and Africa (South Africa excepted)!

Surely it is time that the Government set a legal timetable to ban non-smart card processing at point of sale in Ireland so as to get fraud levels down to near zero% (a la France), and reduce transaction costs for retailers and interest charges for cardholders alike?

zz..

Jokah

You have a good opinion.

I'm sorry to say there are a lot of holes in the text.....Some things are not accurate at all...

eth0_

I received a replacement credit card from MBNA a few months ago, with a chip on it....ok I don't see any shops doing anything with the chips but it's a start

dahamsta

Originally posted by XPThink
I'm sorry to say there are a lot of holes in the text.....Some things are not accurate at all...

Eh?

Jokah

Eht0 go to www.chipandpin.ie for more information.

The plan is to be completed by 2005 for all stores to accept cards and all cardholders to have chips in their credit cards. This is a massive operation and will take some time.

You can still use your Magnetic stripe as usual.

De Rebel

Originally posted by XPThink
. This is a massive operation and will take some time.

Like most things in life it can be as massive and complicated or as simple and as straight forward as you like.

The banks in this country are a bunch of short sighted money grabbing gangsters. This is another example of their complete disregard for their customer’s best interests.

The concept of using a PIN to authorise transactions is tried and tested and proven in other countries. It should have been implemented here years ago. Either the roll out of the online terminals in the late 90s or the equipment replacement program brought on by the euro changeover would have been ideal times to introduce this technology. But no, the lazy greedy banks couldn’t see the need and couldn't bring themselves to spend the money.

Even now, its being dragged out ridiculously. The whole thing could be rolled out in six months. All it needs is an accelerated card replacement program.

dahamsta

The banks in this country are a bunch of short sighted money grabbing gangsters. This is another example of their complete disregard for their customer’s best interests.

<applause>

XPThink, you still haven't explained your comments above I noticed. I don't know about everyone else here, but I have absolutely no respect for unsupported refutations.

adam

Jokah

The problem is I don't know how much I can say at this point.

But to correct somethings. The term "greedy banks" is so over stated. Firstly De Rebel, the banks are forking out everything for this Chip project and spending a lot of money on this project to get it in place. The banks and card issuers are paying for the replacement cards and terminals. The government are going to once again receive money on. (On a side note the banks are totally opposed to the credit card tax. how are we to move to an electronic society when the government are the biggest users of cheques and cash in this day and age. Please...don't blame the banks for being greedy when it is our government who are to blame.) If anyone is going to pocket money it is the government and retailers. Rip off merchants such as computer vendors, plumbers electricians, any retailer in goods or services. Price hikes are their fault and it is RIP off ireland....not just banks dude.Surcharges by retailers for using your credit card????? Interest charges go to the schemes. I.e. VISA and Mastercard not the banks.

It is laughable, absolutely laughable to think this project can be rolled out in 6 months. Thats like saying the luas could have been built in 6 months also. Well the reason the luas takes so long is because the infrastructure is not in place. It is the same with this chip project. The infrastructure is not in place and the technical side of this project is massive. There are problems associated with projects from start to finish.

You are right to say that Pin technology has been tried and tested in other countries. I do not know the reasons for why it hasn't been implemented here sooner, but I will find out. And I doubt that when France Germany or Spain or america implemented this project it took 6 months. I know the retailer/merchant ratio is far greater in these countries compared to Ireland but come on.

Ok, bank charges are in place and I myself sometimes think it is awful to be charged 20cent to withdraw money from accounts. other charges apply to but to pay an electrician 140 euro for 15 minutes work?

The whole point of chip and pin is to combat Fraud and PROTECT the customer interests as well as the banks. This Chip project will cut down on Lost and Stolen fraud and Counterfeit card fraud. Chip cards will protect a customers account when it is lost and stolen and stop the card from being counterfeited. (There is a whole area I cannot go into here because the information is not available yet.)

This is a massive and complicated project. You ever thought that some people and even retailers dont want to use Chip cards? They dont think it is worthwhile. There are external factors that are affecting the banks rolling this project out, massive external problems and it is coming from joe soap customer and johnny retailer.

The pin project has not been in france for 25 years.

It is up to the customer to report it stolen and the account is immediately stopped so no transactions can be made on it. But no......ever think that some consumers think "ahhh well sure ill leave it till i get home, nothing is going to happen to my card".

I am looking into the "3 times failed attempt the card switches off".

"And as far as telephone and mail orders are concerned, the cardholder’s postcode should be obtained and verified with the card billing address – making it difficult for someone who steals a card or card number to use it for mail order."

you really think retailers are going to send business away just because addresses dont match?

"Surely it is time that the Government set a legal timetable to ban non-smart card processing at point of sale in Ireland so as to get fraud levels down to near zero% (a la France), and reduce transaction costs for retailers and interest charges for cardholders alike?"

Yeah sure, the government......Id love to see that, I really would, but its our government..........the ones who charge u 40 e for each credit card and 10 and 20 euro for atm and laser cards. The Governement who get that money. Great idea but it will take ages for them to do it...........

Ireland will not have chip only cards. Both the mag stripe and chip will be used. The mag stripe is the last resort however. Chip is safer for the consumer.

The 3 digit card security code is worldwide, and has helped cut out fraud a lot...

Probably a lot of mistakes etc grammer wise in this but its saturday afternoon and couldnt be bothered harping on more about it.

I like this debate. Sure banks charge us for stuff. But i get ripped off whereever i go...government, retailers, services. if any of you provide a service im sure you rip off people......

sceptre

Originally posted by XPThink
you really think retailers are going to send business away just because addresses dont match?

They will if the banks make it a piece of verifiable information without which the retailer does not get paid.

if any of you provide a service im sure you rip off people......

Even if that's true (and I doubt somehow that it is), it's not a licence for everyone to start at it. It's not an excuse for those that do and if you're using it as such I'm sure you can come up with something less pathetic as a closing argument.

dahamsta

XPThink, you lost me in the second paragraph. First of all, the suggestion that banks aren't greedy is frankly offensive. I've seen their profits, and there's no way they could make that amount of money in this economy - the economy that they and their buddies in the venture capital world ruined for their own benefit - if they weren't sticking it to their customers at every turn.

And don't even think of throwing out the old argument that they're simply looking after their legal obligations to their shareholders, because it's a very weak excuse that I have absolutely no truck with. They're paying for the rollouts? Well boo-hoo, they can bloody well afford it, and if it's in /anyone's/ best interest it's the merchants, so maybe they should try billing them for it. (See how far they'd get.)

Yes, we're being raped at every corner, by merchants, retailers, plumbers, contractors, even sweety shops. But the banks are by far the worst, and critically: Always have been. They should be wearing bloody masks.

adam

Jokah

I think you have a serious gripe with the banks guys. So what if they are making money. It costs me around 40euro to run my bank account. Now I think the service the banks provide is excellent and there service has made my life a hell of a lot easier...Granted there are one or two charges I might question but overall I think it is an excellent service and its worth the money, a little 40euro for that comfort.

And I don't think the banks are the worst offenders......thats just my opinion. I think the retailers are the worst offenders especially in Dublin. when i see prices here i cry.

Greedy, who isn't greedy in this day and age. As Gordon Geeko in the film "Wall street" says, "Greed is Good". I don't feel I'm being ripped off by my bank.....I feel I'm being ripped off everytime i buy something in a shop. Even during the sales the prices are high...

Dahmasta you lost me in your first paragraph.I don't quite understand the point so could you rephrase please? thanks.

Yeah and maybe my last closing point was a bit lame, but at that point i was just getting tired so sorry.....

This debate seems to have moved onto the banks and their greed. Do you both hold a bank account?

Have I answered all the chip and Pin questions? Please let me know...

sceptre

Originally posted by XPThink
Greedy, who isn't greedy in this day and age. As Gordon Geeko in the film "Wall street" says, "Greed is Good". I don't feel I'm being ripped off by my bank.....I feel I'm being ripped off everytime i buy something in a shop. Even during the sales the prices are high...

Sorry dude but you're doing it again. You're trying to justify one group overcharging just because another group do. You've even conceded that they're greedy by the looks of it.

Don't you remember what happened to Gecko at the end of that movie? The evidence gathered by Bud Fox was enough to (rightly) indict the guy for insider dealing and instrument fraud. The guy was going to jail. It was a morality tale, not an instruction manual.

(nitpicker alert: and he never simply says "Greed is good" in the movie either, though his opening line at the Teldar Paper AGM does contain the words, just not all together)

dahamsta

I think you have a serious gripe with the banks guys.

Of course I have! They're greedy arseholes. Which part of this are you having difficulty understanding?

So what if they are making money.

They're making too much money.

It costs me around 40euro to run my bank account.

It shouldn't cost you anything. How naive are you exactly? You think they take your money and put it in a nice vault and protect it with big strong burly men? They don't, they invest it and make more money from it. We're providing them a service!

And I don't think the banks are the worst offenders......thats just my opinion. I think the retailers are the worst offenders especially in Dublin. when i see prices here i cry.

Obviously the tears are blinding you, because you're not seeing the profit margins in front of your face. Read the annual reports and compare the profits of the retailers to the banks. Then come back and tell me that retailers are worse. If you do, you'll be a liar.

Greedy, who isn't greedy in this day and age.

And that makes it right?

Dahmasta you lost me in your first paragraph.I don't quite understand the point so could you rephrase please? thanks.

You really don't want to smartmouth me XPThink. I'm not in a good mood.

Do you both hold a bank account?

Because I have no choice, of course, I have a business to run. If it wasn't for Charlie McGreedy though, I'd have shifted ever last cent to the Credit Unions years ago.

adam

De Rebel

XP

I’m not sure its worth trying to argue with you. Despite your long rambling post, you have still failed to substantiate your original assertion

Originally posted by XPThink
I'm sorry to say there are a lot of holes in the text.....Some things are not accurate at all...

It strikes me that english may not be your mother tongue, and if this is the case I guess you should make one more attempt to explain those comments. Try sticking to the point, what were the holes in zz03’s argument?

May I address two issues, briefly

The Greed of the Irish Banks: Remember ICI, remember the Dirt scandal, look at the disparity between deposit rates and lending rates, look at the current lending policies and in particular mortgage policies and the effect that these are having on house prices, look at the range of products and services and the prices being charged, does the work cartel spring to mind? While there is greed in other sectors of Irish society, I believe that the banks make most others look like crass amateurs. They are greed personified. And as someone who provides what I believe to be a good quality and value service to my clients, I am living proof that your statement “if any of you provide a service im sure you rip off people......” is balderdash.

"It is laughable, absolutely laughable to think this project can be rolled out in 6 months" Whenever I hear emotive language like “The infrastructure is not in place and the technical side of this project is massive. There are problems associated with projects from start to finish“ and “This is a massive and complicated project” The alarm bells sound big-time. I have listened to this on many occasions from project managers and when I hear it I know that its time to get a new project manager. That sort of self defeating talk achieves nothing. This project bears no comparison whatsoever to the Luas. If you were installing telegraph poles and cabling up the country to take a new network to handle your cards, then it would be comparable. There is no inventing to be done, no hard infrastructure to be built. Simply adopt the tried and tested solution from other marketplaces and implement it here. This project needs 4 things; Replace the cards; Replace the terminals; Revise the interfaces between the terminals and the banks mainframes; Train the users. Nothing there that couldn’t have been done years ago and certainly nothing that needs to take more than a few months.

Where there’s a will, there’s a way.

Jokah

Thank you slagging for English my........Oh and English is not my first language...........

Oh and Dahamsta I WASN'T being cheeky when I asked you to explain the paragraph I honestly couldn't understand it.

De Rebel, this project cannot be rolled out in 6 months. The technical side of this project will take a lot of time to rollout to all Point of Sale terminals. As I already mentioned some retailers and consumers ARE AGAINST this Chip project and it is THEM as well as other EXTERNAL issues that are holding back this project.

"Simply adopt the tried and tested solution from other marketplaces and implement it here. This project needs 4 things; Replace the cards; Replace the terminals; Revise the interfaces between the terminals and the banks mainframes"

This sounds all very good on paper. But you don't think this takes time? Training Ireland's 40000 retailers with new machines and terminals. Replacing 80000 card terminals. The project completion date has been set: 2005. If we said to the general public that completion and implementation would take 6 months and we didn't deliver in time what do you think the response would be? I'm sorry De Rebel but this project is too big to roll out in 6 months. It is not self-defeating talk from a project management team. They are being realistic making sure this project goes smoothly.. I do not know why this project wasn't rolled out sooner. I cannot give you the answer to that. I don't honestly know.....

Ok I was VERY harsh saying, "If you provide a service I'm sure your rip people off". I am sure you guys are not offenders and I am sorry if I have offended anyone. I apologise and take that comment back. Apologies..

Dahamsta of course banks are making more money than retailers. And please don't patronise me for thinking that money is locked up in a vault. I know about Banks' profit margins. I know their margins are different to retailers. Dahamsta you have your opinions with the banks. I respect those opinions. But I have my opinions about them to. We have conflicting views and I am leaving it at that.

Also I shouldn't have singled out retailers for being greedy to. There is greed in other sectors of this economy and I am sorry for just singling out retailers.

I'm not familiar with ICI and the DIRT scandals.

I do remember what happened Gecko at the end of the film. But what he was doing was illegal yeah I know that. Banks are not making money illegally. Are they? I do disagree with one or two bank charges but other than that I find that I am not being ripped off and I find the service they provide exemplary. I don't think banks are greedy. They make money, a lot of money and they do it well. That's just good business.

Jokah

To ensure chip and PIN cards are recognised and accepted in all countries where card payments are made, countries around the world are building them to an international specification, known as EMV, set by the international card schemes, Visa and MasterCard. The UK is at the forefront on an international roll out of EMV compliant chip technology.

France has been using a domestic chip-based PIN system for several years and has committed to upgrading its systems to EMV specifications by mid 2003. Other European countries expected to implement EMV standard Chip and PIN over the next five years include Austria, Belgium, Denmark, Finland, Germany, Iceland, Ireland, Israel, Italy, Luxembourg, The Netherlands, Norway, Portugal, Spain, Sweden and Switzerland.

France have not been using the Chip system for 20 years. Go here to see what countries are currently rolling out Chip and PIN.

http://www.chipandpin.co.uk/faqs/map.html,

Jokah

B]"A key requirement is a law or regulatory regime to force retailers to process card transactions from nationally issued cards via the PIN and chip reading route. When all debit and credit cards in a country have been issued in smart card form, a retailer should no longer be able to use the magnetic stripe function or manually key the card number. "[/B]

Businesses need to have the chip and Pin system in place by December 2004. If they continue to only accept the old "swipe and sign" method after this date, then the liability for fraud preventable by chip and PIN technology will rest with the retailer. Non-smart processing will be stopped after this date....

"If Ireland has chip only cards"

Ireland will not have Chip only cards. The magnetic stripe will still be functioning but only used as a last resort. It is up to the Tollbooth operators to decide whether or not they want Chip and Pin or Mag stripe. If they use Mag stripe, as said above, they will be liable for the fraud.

"the entire motorway network (if it ever gets built) would be grid locked"

Are toll operators not causing the gridlock chaos already?? Traffic backed up from the Toll near Liffey valley to Tallaght or the Airport? ON A MOTORWAY????!!!!!

I also received something today regarding the rollout for Chip and PIN here in Ireland and across Europe. You say 6 months???? For businesses it can take one year to 18 months to design, certify and install the chip and pin technology.

ZZ03 said:

"This of course assumes that the country in question has got around to implementing a postcode system. The only two areas of the world that spring to mind that haven’t are Ireland and Africa (South Africa excepted)! "

This is An Post's Issue not the banks. An AVS (address verification system) would be so good to combat fraud. Blame An Post for not having a post code system.

"interest charges for cardholders alike?"

Interest on accounts is charged by the Card Schemes not the banks.

..."not the dumb American 3 digit security code printed on the back of the card (used by AIB and BoI etc) –"

Once again the CSC is not a dumb security code. The 3-digit card security code is worldwide, and has helped cut out fraud a lot. For all the training we do, retailers still ignore the fact that the CSC exists. Example - A retailer does a CNP (card not present) transaction, (over the phone etc.) and asks the buyer for the card security code. If the buyer cannot give it to them it means they do not have the card in their hand. Most likely it is a fraudulent transaction - card details are written down from a card or a receipt has been picked up off the street and the fraudster is chancing their arm.

Only now are retailers beginning to realise the potential of this CSC. A lot of them still go ahead with the transaction without asking for the CSC and wonder then why they get a chargeback two weeks later. They didn't follow simple guidelines. I have seen thousands of cases like this. Now though the number of fraud cases is falling because retailers are stopping the fraudster at the front line because the fraudster is not able to provide the CSC. So to say it is a dumb security code it is not and a very naive comment to make.

"France has had chip cards for about 25 years and these cards still retain a magnetic stripe "

Wrong. France has had Chip and PIN for 11 years. They are currently rolling out to the new EMV standard like all European countries. Everyone is to be up to standard by 2005.

"Many retailers updated their point of sale systems for the Euro introduction. " "some of which equipment will be only a year or two old!"

The programming and software was updated not the actual machines. A small number of retailers were re issued with new terminals yes but the terminal software and programming was the only thing to be updated during the euro changeover. All the terminals will have to be replaced though for Chip and Pin because there will be new software and new technology.

"The logical route would have been to move to chip cards at that point"

No it would have not been a logical route. The Euro Changeover was massive for consumers, banks and retailers. Ireland was one of the quickest countries to adapt to this changeover but it still was a massive project. All the three parties concerned here, consumer’s banks and retailers were very busy with this changeover and to introduce another new system would have been complicated and a drain on all concerned.

"He neglected to mention the main benefit of the chip card when properly implemented – i.e. if one is stolen it automatically “switches itself off”. The thief has three chances to guess the PIN (a 4 to 6 digit number). As with a mobile phone, three wrong attempts and the card is blocked, making it useless at the point of sale."

When the card is stolen it does not switch itself off automatically. A thief will have 3 chances to guess the PIN, but most criminals stop after they fail after one or two attempts so they can try the card elsewhere at a different terminal. If they try to guess 3 times in a row and fail they run the high risk of being caught. Also after 3 failed attempts the card will be blocked.

"20 years behind the Continent where PINs and chip cards have been in regular use at the point of sale. "

Wrong again. See the paragraph above this for proof. Most countries are only starting to roll out this......

"Having listened to the interview one wonders if they (the Irish banks) really understand how they (smart cards) operate? "

Pity really. The person you heard Harping on has extensive experience in this area and has been involved in a number of similar Chip projects before. Why the hell do you think he has been brought in to deal with this project?

XPTHINK.