Consumers in Malaysia will soon be able to pay for their shopping with contactless, EMV standard smart cards, as Visa does away with the need for a signature with the launch of its new system, Visa Wave.
The company is running a four-month trial with 2000 Visa customers and over 150 merchants. The idea behind it (apart from selling lots of card readers) is to speed up the payment process. This, Visa hopes, will encourage people to use their cards more often in place of cash. Cardholders just need to wave their card near (within 4cm) the reader and the transaction goes through.
The move contrasts sharply with the added layers of secure authentication in Europe and the UK. To pay in person in Europe, and soon in the UK, we have chip-and-PIN-and-signture, while Asia Pacific does away with the authentication step altogether.
The implications for security and fraud are not altogether clear, particularly with respect to skimming the card details, and the possibility of card cloning. These are the issues that chip and PIN is being introduced to tackle: a cloned card is useless if it is not accompanied by the correct PIN.
The Visa Wave system seems similar, in terms of risk, to using your card in a ticket machine at the train station, for example. In this case, you insert your card, the details are read and the cost of the ticket is debited from your account without any further authentication.
However, what is not clear from the announcement is the interaction between the card and the reader. The important question is whether it would be possible to skim card details without a person's knowledge, for example, by scanning handbags and pockets with a duplicate reader on a busy train.
One would hope that a company like Visa would make sure that the data on the card is properly encrypted, but so far we have not been able to confirm those details with them. ®
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