The Simon Tonekham Statesman

Remember a couple weeks back when I did a post about a common and fool-proof payment system that doesn’t exist in real life? Well, this is what I had in mine. I already had mentioned about chip cards coming to Canada in the next several and from what I had googled on, there were a few attempts by major banks with credit card companies trying to get the idea.

A couple years ago, CIBC (with the help of American Express) launched the entourage credit card. This particular credit card has a chip embedded on the card. When shopping online, the user has to insert his/her credit card in a convenient chip card reader (providing if its connected to the computer’s USB port) and they don’t need to enter their credit card number by typing it. The software automatically detects the smart card reader and prompts the user to enter a password. The information is then authenticated and passed over by the bank.

The entourage card wasn’t able to appeal to many customers (CIBC holds a major agreement with VISA currently), as it has with many chip embedded cards, it quietly flopped sometime between 2003 and 2004. As for the redundant credit card readers that cardholders applied for, they’re completely useless. If the system was in place today, I could have took that opportunity – however there are lots of countless security flaws with the system – especially if you do online shopping with another web browser (such as Mozilla Firefox).

However, two new security initiatives are being (but slowly) implemented: Mastercard’s SecureCode and Visa’s Verified By Visa. The user has to simply enter a password that he/she configured online and in moments, the user shops with confidence. I’m not sure if American Express has a similar feature competitive to Visa and Mastercard’s secure feature.

Note to all banks, credit unions and online retailers: Implement an option for users to pay for online purchases directly from their bank accounts and/or provide support for users to insert his/her chip-embedded card without the use of entering their credit card number. Top that off with allowing the user to enter his/her secure PIN number so they can shop with complete confidence.

References:

http://www.evalu8.org/staticpage?page=review&siteid=9727

http://www.tsys.com/news/press_release_article.cfm?News_ID=96

http://www.internetsecure.com/press/pressrelease4.htm

http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B6W6X-4D671FF-5&_user=2900775&_coverDate=09%2F01%2F2004&_rdoc=1&_fmt=&_orig=search&_sort=d&view=c&_acct=C000059114&_version=1&_urlVersion=0&_userid=2900775&md5=d89ad70376495f9ddc97af605ba4cbfe