BNZ has gained global patents to a new technology it says aims to prevent the “skimming” of cards.
A spokesman for the bank told NBR that both local and international organisations had expressed interest in licensing the technology - which has been two years in development and testing - but so far no deals had been done.
BNZ's parent, National Australia Bank, is currently evaluating the technology, the spokesman said, and has yet to adopt it for customers.
Skimming is when information on an Eftpos or credit card's magnetic stripe is captured by fraudsters without a customer’s knowledge.
A skimmer could be someone who attaches an illicit card reader to an ATM, or a malicious waiter who uses a pocket reader on the way to the til.
Invented and developed in New Zealand by BNZ’s Fraud Initiatives Manager Michael Turner, the security technology is called Liquid Encryption Numbers or LEN.
“On standard bank and credit cards, the information stored on the magnetic strips is static and doesn’t change,” Mr Turner said.
“With LEN, we’ve made that information dynamic so that it changes every time a customer visits a BNZ ATM – this means if criminals copy the data on the cards they won’t be able to use it for fraud,” Turner says.
“We believe this to be a world first and we invented it here” says BNZ CIO Peter Yarrington.
Magnetic strip-only cards have begun to be phased out in New Zealand in favour of chip cards.
But a BNZ rep told NBR that magnetic strip cards probably had another 10 years left in the US, as they're far more cost efficient.
Beyond that, LEN also works with chip cards, should the baddies find an easy way of hacking them.
The technology also helps a bank pinpoint where the data was stolen, Mr Yarrington said.
And if the bank detects a LEN-enabled card has been compromised but not yet fraudulently used, it doesn’t need to be blocked, which is inconvenient for customers who have to order new cards, said MR Yarrington.
“Instead, we can just ask customers to visit a BNZ ATM where their cards can be secured by updating the LEN – this is a simple, automatic process, with minimal inconvenience to customers,” says Yarrington.
LEN has been rolled out to New Zealand customers for the past two years, and already, BNZ has seen a decrease in fraud figures.
“Since the implementation of LEN losses from the most common form of card fraud have more than halved,” Mr Yarrington said.
However, at an Auckland press briefing today, the bank declined to give any exact numbers.
Wed, 23 Jun 2010