Smart cards to cut down on fraud

Smart cards, credit cards embedded with a chip, are expected to replace the current magnetic strip cards in the Greek market by 2005, in a move expected to help reduce cases of fraud, credit card organization Visa Hellas said yesterday. «Credit card fraud in Greece accounts for less than 1 percent of total card turnover against 0.08 percent worldwide,» said Periklis Drougkas, head of consumer banking at ING Bank. With around 4 million credit cardholders in Greece at the end of 2001, companies and consumers, however, need to be vigilant against this problem, he said. He said that smart cards, which contain the cardholder’s details and safety features, are very difficult to counterfeit. The ability to program in a spending cap also limits this possibility. Visa EU, the European organization, in the meantime, has a risk management strategy to help minimize credit card forgery with their focus on counterfeit and cross-border fraud. Robert Littas, vice president of risk management at Visa EU, said countries considered fraud hotspots are: the UK, France, Spain, Italy and Turkey. He said that 50 percent of card fraud cases involve cross-border transactions. Referring to credit card interest rates, still in the double-digit range, despite falling rates in lending and savings, Drougkas said reductions will depend on when the Bank of Greece will lift curbs on consumer lending and the launch of a credit bureau which would facilitate credit checks.

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