Banks in China are preparing their ATMs to meet with the EMV international standard in a bid to avoid credit card fraud.
The central bank, , has already stepped up the EMV program and amended rules on smart cards or cards embedded with identity chips. Selected cities in China will pilot EMV migration this year, and local commercial banks are starting the controlled deployments for chip cards at point-of-sale (POS) terminals.
EMV is an international standard developed by Europay, MasterCard and Visa, which relies on a combination of information stored in the chip and the use of a personal identification number (PIN) to authorize transactions, a system more effective in countering card fraud than swiping a magnetic strip and signing on a paper receipt.
Statistics show that card fraud costs the banking industry an estimated annual global loss of US$2.5 billion.
"Although the economic loss from card fraud is still not that high in China, the potential migration of card fraud to China cannot be underestimated," said Sharon Dickie, director of global marketing for software and security with NCR's Financial Solutions Division, which has close ties with Chinese banks. NCR is a service and technology providers of products including ATMs, and data warehousing solutions.
It is critical for China to be a part of this global migration, in the light of its potential as the world's largest credit card market, the growing number of foreign tourists, and the upcoming 2008 Olympics and 2010 World Expo, Dickie said.
"All these drive toward the need for China to comply with the EMV international standard," Dickie said.
"Based on our proven global experience, we recognize that chip-card migration will be a challenging task as it does not only involve the front-end hardware but also the back-end applications and its infrastructure," Dickie added.
To protect banks' investments, NCR recommends local banks participate in the EMV-Ready program and upgrade their ATMs with EMV technology as soon as possible.
(Xinhua News Agency September 21, 2005)
