France Getting Smart Over Cardsgreenspun.com : LUSENET : Grassroots Information Coordination Center (GICC) : One Thread
France Getting Smart Over Cards Reuters 6:00 a.m. 15.Mar.2000 PST PARIS -- France's smart payments card system, hit by a wave of scare stories about possible fraud, is to speed up its switch to compatibility with the euro currency to ensure tighter security, its managers said on Wednesday.
Cartes Bancaires, the interbank group that manages the system, will also step up a drive to introduce new cards with longer code numbers and tighten procedures to ensure the user's privacy, its chairman Michel Renault told journalists.
The French, avid users of chip cards that Cartes Bancaires says are among the safest in the world, have been left worried about massive card fraud after someone posted on the Internet the secret code allowing pirates to copy existing cards.
The Bank of France has tried to calm the debate with a reassuring statement and the smartcard inventor has offered a one million francs ($148,000) reward to anyone who could actually crack the cards' secret codes.
Renault said France already planned to replace all payment terminals -- from automatic tellers in banks to hand-held registers in cafes -- with improved systems by the end of 2001 as part of the switch to the euro currency in 2002.
"We have set a goal to accelerate this so it is finished by the end of 2000," he said, adding that French banks would invest 300 million francs ($44.30 million) to improve the system.
Cartes Bancaires would also step up the drive started last autumn to swap out old cards with new ones guaranteeing tighter security through longer code numbers, he said.
New software to be introduced in the coming months would also redesign terminal printouts to hide the card number and expiration date that are now written on receipts.
Some terminals even print out the cardholder's name, meaning that fraudsters only have to collect the receipts people often carelessly leave at supermarket checkout counters or in public wastebins to use the data for purchases over the Internet.
Renault insisted the French system was one of the safest in the world, showing figures putting the level of fraud at 0.02 percent of all transactions last year.
Fraud was much higher, at 0.27 percent, in 1987 before France abandoned the swipe cards widely used elsewhere.
By comparison, Cartes Bancaires administrator Yves Randoux said card fraud was "growing exponentially" in Britain, where the easily copied magnetic strip cards are still common.
Renault stressed that no case of fraud had been found to spark off what he called the "media tumult" about card security.
He admitted that the published secret code could permit a limited number of copied cards but said the threat was minimal.
"There is zero risk that this will lead to massive fraud," he said about the code, which experts say will only allow fraudsters to buy items under 500 francs ($74). But he said nobody could guarantee complete security.
"Inviolability (of the system) does not exist anywhere on earth," he said. "It is, however, very safe."
-- Martin Thompson (email@example.com), March 15, 2000