Slow chip card migration, growing cybercrime

- Tuesday, July 5, 2011

Slow chip card migration, growing cybercrime

Two and a half years after the launch of chip technology for credit and debit cards in Colombia, only 3.5mn of 23.9mn cards have migrated to this technology, local paper El Tiempo reported.

Chip technology - which cannot be cloned, according to experts - seeks to reduce the risk of fraud and card cloning, crimes that have taken in close to 20bn pesos (US$11.2mn) in the country in the last seven years.

Since the launch of this technology, 2,164 cybercrimes have been reported, representing frauds for more than 7bn pesos, including online fraud.

Start your 15 day free trial now!

cta-arrow

Already a subscriber? Please, login

In 2009 alone, Colombian police reported 590 cases of cybercrime, and in 2010 that figure increased 68.3% to 993.

This year, the scenario is not any better, since 581 cases were reported during the first five months of the year - nearly the same as the total for 2009.

One of the reasons behind this slow adoption seems to be cost, according to the paper. Some financial entities charge for migrating to chip technology.

Bancolombia, the largest bank in the country and most advanced in this area with 2mn chip cards issued, charges 17,500 pesos for migrating credit cards and 12,500 pesos for debit cards.

BBVA, the largest foreign bank operating in the country, had 614,915 chip cards at the end of May, 44% of the bank's total.

The migration process is not done automatically as the user has to request it. But not all banks have implemented this technology, even though it is required by local regulations.

On top of that, only 2,000 ATMs out of 10,500 in the country are suited for chip technology.

Credit card transaction volume in Colombia increased to 1.52tn pesos in April, up 18% compared to the same month in 2010, according to the latest figures from financial services regulator Superfinanciera.

As for debit cards, volume reached 9.66tn pesos in April, a 39.2% increase from the same month last year. The number of transactions reached 44.1mn, a 19.8% increase.