Chip cards to help stop ATM fraud
The cash card in your pocket is set for a massive security overhaul when banks begin the roll out of a plan to replace 20 million magnetic ATM and credit cards with chip cards.
Hong Kong Monetary Authority chiefs said yesterday that in addition to replacing the cards, banks would upgrade 2,900 ATM terminals, starting early next year. The project is expected to be completed by the end of 2015.
The announcement comes just two weeks after police arrested a gang of international conmen who withdrew more than HK$800,000 from ATM machines in the city over a two-week period using blank cards with magnetic strips encoded with stolen data. About 200 bogus bank cards were seized.
In January, three Romanians were arrested after 29 fake payment cards were used to withdraw HK$2 million.
'Compared with the magnetic strips currently in use, such chip-based technology will make it much more difficult for fraudsters to replace ATM cards with stolen data,' the authority said.
The Hong Kong Association of Banks said chip-based technology was picked after a year-long study.
'Chip-based cards are more advanced and complex than magnetic-strip cards. The adoption of chip-based ATM technology will further enhance the security of cards,' the association said.
As many ATMs internationally still use magnetic strip technology, the new chip card will continue to feature a magnetic strip. But enhanced security measures will be implemented.
The ability to withdraw cash outside the city would be pre-set on cards as 'deactivated' and would need to be activated by cardholders, who may also restrict when cash could be withdrawn internationally and set a lower withdrawal limit for overseas transactions.
'Chip-based ATM transactions offer greater security,' said Nelson Man Siu-kwan, the authority's executive director (banking supervision). 'Together with the enhanced security measures for overseas ATM transactions, cardholders will be given better protection against fraudulent practices.'
The authority said it would work with the banking industry to monitor technological developments.
The number of bogus credit or payment cards seized in Hong Kong last year
- The figure is down from 715 in 2009