Steward Bank has issued a notice warning its customers about the increased risk of transactions involving credit and debit card cloning (card cloning). The Customer Notice is asking customers to be vigilant when using their cards and it went to great lengths prescribing habits customers can take to guard against card cloning.
The increased use of plastic money in Zimbabwe due to cash shortages has coincided with an increase in card cloning. A report published by the Zimbabwe Republic Police in March disclosed that in the first quarter of 2018, at least $200 000 to the perpetrators of bank card cloning.
It’s no surprise that fraud concerning card cloning is rising in Zimbabwe because all but one bank, CBZ in Zimbabwe use old Magnetic Stripe Cards which are considered to be less secure compared to the relatively new Chip Cards. CBZ not only has ‘the secure’ Chip cards, it goes further in guarding against credit and debit card fraud by offering a service which enables its customers to remotely lock their CBZ credit and debit card ensuring that the cards will not be able to do transactions.
Why Magnetic Stripe Cards not secure compared to Chip Cards
Chip cards offer much better fraud protection than the (now) antiquated magnetic stripe cards simply because magnetic stripe cards use technology that can be easily be breached by fraudsters.
Magnetic-stripe cards are magnetized. When you swipe them, the payment processor reads their magnetic fields and matches them to your bank account information. The problem with this is that the data is static, making it easier for fraudsters to lift your information and clone it onto a new card. In fact, there’s is a device called a skimmer, which they can get or make for as little as $20 that can clone a card pretty easily.
On the other hand, the data on chip cards is constantly changing, making it extremely hard to isolate and extract. To rip it off, someone would have to get into the physical chip circuit and manipulate things to get your bank information. Not only is this level of data manipulation really difficult, but it also requires a set of high-tech equipment that can cost north of $1 million. That’s not the kind of cash your average fraudster has handy.
Why Banks in Zimbabwe continue to use Magnetic Stripe Cards?
The obvious reason is that the Chip cards are still expensive relative to Magnetic Stripe Cards. The cost of adopting Chip Cards is not only limited to ordering the Chip cards but upgrading and replacing the existing debit and credit infrastructure so as to accommodate the new Chip card technology. Whilst it’s pretty expensive to adopt Chip cards, it’s better than to lose customers in the event of customers losing trust to use credit and debit cards due to falling victim card cloning.
Switching to chip cards is more than just saving money it’s about protecting customers. Plus, less fraud means fewer headaches from disputes and better service for customers. Local banks should stop contemplating about the cost of introducing Chip Cards and prioritize their customer’s safety.
11 comments
Its high time banks upgrade cards to EMV (chip and PIN). Anyone who frequently uses his or her Mag-Stripe bank card should be worried about this security risk. This is not a laugh matter and should be taken seriously starting with RBZ.
Something we do in Zim that never happens elsewhere is hand our card to the teller to swipe. We should probably start insisting that we swipe our own cards and the teller just enters details of the transaction. This was we know how the swipe should feel and know to be suspicious if it feels loose or bulky (ie when a skimmer is present)
Skimmers have shrunken down to a level where you can’t tell there are there unless you dismantle the POS machine. Criminals don’t even need skimmers, they can install malware on the teller’s computer and read the track data from the computer. Knowing what I know about the attitudes towards security in banks – the only reason we are safe from international organised crime is that there’s no way of easily remitting their loot.
shuwa
Alternatively banks can copy the Security system we use at TLC Payments. When one swipes, instead of entering a preset Card PIN to authenticate the transaction, a unique transaction PIN is sent from the Host Bank Service server to the client’s phone as a Text Message. Thus the client will be required to enter a unique pin each time a transaction is made. With this system cloning cards will not work since the fraudster will not have access to the PIN unless of course the frauster has access to the client’s phone.
Everything has an upside and downside. It also means that if there is a cellular network outage, or my phone is absent (forgotten, stolen or lost), I cannot transact. As well, if the network or SMS gateway is slow, transaction times become longer running the risk of timing out whilst waiting for the PIN. If you’ve ever had to wait for an OTP whilst doing transacting online you’ll understand what I mean.
I don’t think banks care….. profits or 10 million against a quarterly loss of 200,000.
Steward iyo pachayo imbavha dzinoba takatarisa, right now since Monday Visa system yavo iri down but they are taking deposits,asi they said upgrade will start midnight to day and will be working by Saturday . Response is we are facing system challenges, funds will be loaded onto cards once its up and running.
These micro-POS devices like Kwenga are also part of the cloning problem. It’s hard to identify a legit device, even amongst the regular POS machines. Most devices neither have the banks stickers, nor are manufactured brands you know like Verifone. An operator just needs to swipe on a fake device, ask you to enter your pin, the transaction “fails” for whatever reason, then they say “Let’s try another POS,” and give you a genuine device, then the transaction goes well. Fraud complete!!
With these odd-ball Chinese devices one also cannot be absolutely certain that card details aren’t being sent elsewhere too.
I’m a MetBank client and our cards have a chip. We are encouraged to use the chip actually.
You have much bigger worries than card fraud if you are a Metbank client. Get your money while you still can.