Taking Chip & PIN Solutions Online

There may never come a time when card fraud is completely eliminated, but past solutions have proved we can certainly limit it. 

Card fraud has been around since banks first introduced payment cards over 50 years ago. Criminals continue to con their way into accounts, while consumers, merchants and banks are left to face the repercussions. Retailers are forced to raise their prices for goods and services to make up for losses. The rise in fraud over the years reflects the flow of new payment technology and the platforms through which they operate.

One such technology, chip & PIN, served the financial industry well when it was introduced into the market back in 1995. There have been various banks and payment groups that have initiated similar at-home solutions to counter online fraud. Such technology has not struck mainstream success due to usability complications and a lack of consumer understanding. But according to The Guardian, a more customer-friendly solution for online payments could be on the way.

Secure Electrans from the UK is working on creating the infrastructure needed to allow chip & PIN for online payments at home. The company aims to simulate typical in-store experiences by offering consumers a similar security process through a “small calculator”-sized device when shopping online.

The device was reported to be free of charge through banks, utility companies, and supermarkets to facilitate chip & PIN transactions over the web. After installation, consumers would then use the device at home or whichever location they were online, and complete the payment the same way they would in a shop.

The device aims to reduce costs for all involved, including consumers and merchants. Ideally, fraud processing and chargeback fees that are often plague merchants would drop since online transactions would be more protected. Consumers would benefit through lower costs and lower risk of fraud.

The Guardian reported that Secure Electrans’ online trial has resulted in zero percent fraud with the new device, and is nearing a commercial launch.

If Secure Electran’s device is well received by consumers and retailers, then it could help to raise everyone’s confidence in the online channel and Internet shopping. ECommerce market sales are continuing to grow globally, which will likely experience further success if consumers are offered a greater variety of choices for secure payments.

To read the full story at the Guardian click here.