August 11, 2007 (LBO) – HSBC, Sri Lanka’s largest credit card issuer, has announced new technology to combat fraud but said its local acquiring network would be upgraded only in the first quarter of next year. In addition to the standard magnet strip, the new ‘smart’ cards issued from this month would have an embedded micro-processor containing encrypted information.
The plastic is not ‘swiped’ across a card reader but ‘dipped’ into a slot in the credit card reader.
Nilantha Bastian who heads credit card lending at HSBC says out of the 7,500 point of sale acquiring terminals about 75 percent is chip ‘capable’. However without a platform to support the machines, the network is not yet ‘enabled’.
There are 11 card issuing banks and six acquiring banks that process the transactions through merchant networks.
“Where we are concerned we are looking at making our acquiring business chip enabled in the first quarter of next year,” Bastian said.
Sri Lanka had 828,000 cards in issue up to May and 23.8 billion in loans outstanding and HSBC has about half the business.
“Here in Sri Lanka what we need to do is raise the industry standards,” says HSBC’s head of personal banking Simon Willia