Asia will have Visa smart cards by 2008
The chip-enabled product will replace magnetic stripe credit cards to cut fraud
Visa International aims to replace its magnetic stripe-based credit cards with computer chip-enabled smart cards in Asia by 2008.
Regional head of chip implementation for Asia-Pacific Bruce Mansfield said a main driver for the migration towards integrated circuit (IC)-enabled credit and debit cards, which will form Visa's plan to replace Visa's global issue of magnetic stripe-based plastic by 2010, was card-based fraud.
'The first driver is to reduce fraud,' he said in Singapore.
He said 80 per cent of all Visa transactions were expected to be done through IC-based cards by 2006, and 100 per cent by 2008.
The global payment services provider has more than 190 million credit cards in circulation in the region. Hong Kong residents account for about seven million.
IC-enabled smartcards will reduce credit-card fraud because of the more sophisticated security features, which can be used on a computer chip. Visa will use a standard jointly developed with MasterCard and Europay, called EMV.
He declined to estimate the cost of the credit card migration in Asia, citing difficulties in the estimation process due to the fast pace of cost reductions in credit cards and credit card terminal replacement, which had declined about 40 per cent over the past year.
An official for Visa said the costs of the migration, which will include replacement of bank-processing systems and credit card terminals on top of the cards, could be borne by the banks, merchants, or third-party payment processors, depending on the country.
However, he said migration talks were still in a very early stage.
There were more than 2,204 fake credit cards seized in Hong Kong last year, nearly doubling the 1,179 confiscated in 2001, according to police statistics.
According to Visa, just two smartcards are in issuance in Hong Kong: Compass Visa from DBS Bank (Hong Kong) and Manhattan's Infinity card.
The European Union was expected to lead the effort in the technology migration.
Visa expected every credit card in that region to be IC-enabled by 2006.
Visa International also said it was considering implementing contact-free credit card technology - similar to that employed by Octopus cards in Hong Kong - in its Visa Mini credit cards.
The global payment services provider has more than 190 million credit cards in circulation in the region
About 80 per cent of all Visa transactions should be done through IC-based cards by 2006