Visa credit cards phasing out signature for smart chip

4 November 2009

Using a signature as security on credit cards will soon become a thing of the past for Visa cardholders after the company announced that it will soon implement PIN and chip security on all its credit cards and other products.

In a bid to make credit cards even safer against fraud, Visa intends to phase out the signature system by 2013 on all of its credit cards and products, of which there are over 14 million currently being used in Australia while also upgrading ATMs and point of sale terminals.

Commencing in January 2010, Visa will only be producing credit cards with smart chips with around 37 per cent of existing Visa cards being enabled with a smart chip. Debit cards and prepaid cards will commence with the smart chip technology from January 2011 with the intention being that every Visa card will have a smart chip by April 1 2013.

These changes to the Visa process will also extend to ATMs Australia-wide as they too will need to be chip compatible by January 2011.

Chris Clark, Visa's General Manager for Australia and New Zealand, explained in a statement from Visa the intentions of the company for its range of products.

"From January 2010, all new Visa credit cards issued in Australia will feature secure embedded smart chips to give Australians a higher level of confidence in the security of their transactions," Mr Clark said.

"Chip technology will also offer banks and merchants the ability to provide their customers with benefits such as faster transactions, innovations such as contactless payments and the opportunity to store information such as reward programs on their cards."

Visa are beginning to implement a seven point security setting on their products, with the new move into complete PIN and smart chip technology as part of this strategy which also includes better online security with the Verified by Visa password technology. This means that online retailers will now record a three-digit cardholder verification number for all online transactions.

"These initiatives are part of a comprehensive security upgrade aimed at providing cardholders with a higher level of confidence and significantly reducing all types of card fraud including counterfeit, skimming and online fraud," Clark said in a statement.

"While card fraud in Australia remains low by world standards, overseas criminals are becoming increasingly active in seeking out new arenas. The time is right to take advantage of the new technologies available to work across the industry, with banks and merchants, to strengthen security across the board," Clark said.

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