Postilion, a leading global provider of payments software solutions and a division of S1 Corporation, today announced it is assisting its African banking and retail clients in updating their technology during the continent-wide migration from magnetic stripe cards to chip cards.
Magstripe card technology is now viewed by many institutions in Africa as obsolete. Too frequently, examples emerge of magnetic stripe cards being copied and used for fraudulent transactions. In South Africa, for example, credit card fraud reached R420 million in 2008, a 146% increase over the previous year, according to the South African Banking Risk Information Centre (SABRIC). This growth in fraudulent transactions is the primary driver for the migration to newer, higher security technology.
EMV chip and PIN technology, created by the international payment organisations, is more secure as data stored on the chip cannot generally be duplicated. Using a PIN in all instances, rather than a signature, adds further to transaction security, thereby lowering instances of card fraud. EMV technology is being implemented globally, which has required new cards to be issued and both ATM networks and retail point of sale acceptance infrastructure to be upgraded.
In the United Kingdom, card fraud dropped dramatically following the introduction of EMV technology as shown by figures released by APACS. Additional applications can be run on the new cards, with the following currently being explored in Africa: access control, electronic ticketing, payment of social grants and pensions, parking and toll payment, loyalty programmes and marketing promotions.
In sub-Saharan Africa's two largest economies, South Africa and Nigeria, the migration to EMV chip and PIN technology is moving ahead at an increasing pace. The Central Bank of Nigeria (CBN) has ordered banks in that country to stop issuing magstripe cards from 1 April 2009 and to move the country's entire card base to EMV technology. With 23 of the 24 banks in Nigeria and the central payments switch all using Postilion software, the company is playing a crucial role in migrating the card programmes and acceptance infrastructure of these institutions to chip and PIN technology.
In South Africa, the first million bankcards have been successfully migrated to the international chip and PIN standards. Although this is only a fraction of the country's total card base, the momentum to change is evident. The continent's three largest banks, all based in South Africa, are Postilion users and they are benefiting from Postilion's extensive international EMV experience. To coincide with EMV card issuance, banks have been upgrading their ATM estates and South Africa's major retailers have also been turning to Postilion to assist them in becoming EMV compliant.
“Having gained extensive EMV implementation experience internationally, including in the UK, which was the first country to migrate to EMV, we are pleased to be assisting African banks and retailers migrate to this new technology and thereby help bring card fraud levels down,” said Francois van Schoor, President of Postilion Payments. “Postilion also looks forward to helping clients explore more applications offered by chip and PIN technology, thus developing new card products and additional revenue streams.”
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