'Chip And Dip' Payment Arrives In NZ
Thursday 11 April 2002
A new era in EFTPOS is being ushered in this week, with the introduction of Visa Smart Debit Credit (VSDC) which enables purchases to be made using a credit card's microchip rather than the magnetic strip.
ANZ Bank's Zed card holders will be the first to use the new technology in New Zealand, which will largely replace the magnetic strip in coming years. Zed customers and merchants simply have to dip the credit card into the new terminals rather than swiping them to make a payment.
Using chip only, a form of fraud called "skimming" will be eliminated whereby people copy others' account details from their magnetic strip. This also reduces the potential for chargeback costs to merchants.
ANZ Cards General Manager Ian Colley says the introduction of chip payment alongside the additional functionality and increased security the new technology offers signals the start of the end for the magnetic strip.
"Chip payment is already available in America, Europe, the Middle East and Asia," says Mr Colley. "With Visa Membership agreement that all credit cards should be chip-enabled over the next three to five years it is only a short period of time until chip becomes the predominant form of payment."
The Visa Head of Chip Cards for Australia and New Zealand, Vipin Kalra, said ANZ was breaking new ground with the introduction of the new technology.
"ANZ has once again paved the way in New Zealand with the introduction of VSDC," he said.
"Visa Smart Debit Credit is a smart and secure way of managing Visa Members risk on cards and terminals. As many Visa Members around the world are rolling out VSDC, the global acceptance of chip based payments is becoming a reality."
EFTPOS New Zealand Ltd - the country's largest supplier of EFTPOS terminals with approximately 40% market share - has already started upgrading its merchant customers to EKLICK 710-16 terminals, the only VSDC enabled terminals in the country. It plans to have 40% of its merchant customers converted to the new model by the end of the year.
"New Zealand's first chip card - Zed - is already delivering benefits such as Instant Rewards which act like paper retail vouchers but are stored on the chip and Verified by Visa; which provides greater security when shopping on-line. Making payments from the chip is yet another example of what chip card technology can deliver."