Malaysians Adopt Smartcards for
BankingMalaysia is introducing smartcards for consumer
banking as 12 anchor banking institutions are replacing their 11 million
automated teller machine (ATM) cards with multi-purpose chip-based cards.
The move to adopt smartcards was triggered by an increasing spate
of card-related fraud losses from credit card fraud in 2001, which totaled
RM40 million. The new generation of chip-based cards that are replacing
the magnetic stripe card will be less susceptible to skimming and
Magnetic stripe cards have been in use for 30 years.
However, they can be easily duplicated due to a lack of security features.
Smartcards, on the other hand, hold certain information secret within a
microchip and are more difficult to duplicate.
Malaysian Electronic Payment System chairman Datuk Amirsham A Aziz,
domestic financial institutions have accelerated card replacement since
January and all ATM machines for magnetic strip cards will be disabled in
According to a spokesperson at Iris Technologies, each
chip-based card contains variable memory capacity and processing ability
making it multi-functional. Each chip contains personal information and
provides security for distance banking and remote online payments. The
falling prices of chip-based cards in recent years have also made them
more affordable for banks to issue to consumers, he said.
Bankcard is one of the seven Multimedia Super
Corridor's flagship applications and offers access to three payment
applications - the ATM, electronic debit point-of-sale (e-Debit) and
electronic storage of monetary value (e-Purse). Bankers can also widen
their scope of services to offer a variety of value-added services such as
customer loyalty point management on a single platform.
months, 4,000 ATMs were upgraded to accept chip-based Bankcards and
e-Purse loading and 974 ATMs now allow cash loading. More than 3,000
merchants are equipped to accept e-Debit and e-Purse. Consumers can
withdraw cash, transfer funds, pay bills, check bank balance and make
cashless payments for goods and services.
Credit card companies are
also pushing the use of chip-based cards. MasterCard is implementing
Magneprint after successful beta testing with CitiBank Bhd, HSBC Bank
Malaysia Bhd, MBf Cards (Malaysia) Sdn Bhd, and Southern Bank Bhd.
Magneprint, a technology jointly developed by MasterCard MagTek, reads the
fingerprint of a stripe's magnetic particles. The distribution of the
particles on the card is random and makes each card unique.
(June 2003 Issue, Nikkei Electronics
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