Credit card signatures to be phased out in Australia

Credit card signatures to be phased out in Australia

Summary: Australians will need to get used to using their PIN for credit card purchases, with signatures set to be phased out from the middle of 2014.

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In a bid to crack down on fraud, Australia's card payments industry has moved to phase out the decades-old practice of signing to verify purchases from August 1 this year.

The changes won't affect online purchases, but will apply to all transactions over a point-of-sale (POS) terminal.

"All Australian cardholders will need to know their credit and debit card PINs by August 2014," said Nicole Pedersen-McKinnon, the spokeswoman for the payment's industry's PINwise campaign.

Pedersen-McKinnon urged people who did not already have a PIN for their card to get one well before the August deadline, to avoid any problems during the transition.

Australian Retailers Association spokesman Russell Zimmerman said the move would make card payments safer.

"The phasing out of signature verification will help protect consumers and retailers alike from fraudsters," he said.

Zimmerman said Australian credit card fraud runs to about AU$81 million per year, most of it on credit cards where it isn't necessary to enter a PIN.

However, the move to a PIN-focused system does not mean that it is a completely safe option, as recent malware discoveries in point-of-sale terminals in the US can attest.

Last month, retail giant Target confirmed a breach where 40 million customers had their name, credit or debit card number, and the card expiration date and CVV (the three-digit security code) stolen. Earlier this month, Target went on to reveal that the names, mailing addresses, phone numbers, and email addresses for up to 70 million people were also stolen along with payment card data.

Target CEO Gregg Steinhafel subsequently said that the company had established that its POS machines were infected with malware, and that an investigation into the breach was ongoing.

"What we do know is that there was malware installed on our point-of-sale registers. That much we have established. We have removed that malware so that we could provide a safe and secure shopping environment," he said.

While Target and Neiman Marcus are the only currently named retailers suffering from POS malware, intelligence company IntelCrawler said that Target's infection was due to a piece of off-the-shelf malware dubbed BlackPOS, and that the first locations of BlackPOS infection were in Australia, Canada, and the United States.

Topics: Security, Privacy, Australia

About

Chris started his journalistic adventure in 2006 as the Editor of Builder AU after originally joining CBS as a programmer. After a Canadian sojourn, he returned in 2011 as the Editor of TechRepublic Australia, and is now the Australian Editor of ZDNet.

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3 comments
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  • Safer with PIN?

    Years ago I used to use PIN when purchasing from retailers, that is until the bank called to say they were issuing a new card because they had reason to believe that the Card+PIN had been copied.

    Since then I've always signed for purchases and only used PIN at ATMs.
    meow meow
  • Why Not Integrate Two Factor Authentication...

    I have wondered for many years why credit cards could not be integrated with a second factor authentication. If the credit card had 2FA and the end user would have to enter the rolling code when making a transaction.
    This way when a transaction is made either online or at a POS you enter in your PIN and the rolling code. I think this will go a long way to eliminating Credit Card fraud because even if someone steals your credit card number it cant be used unless you enter a second factor of authentication.
    The technology is available and is proven, it is just a matter of adopting it for use in another medium.
    Tim Peters
  • Aussie Pins

    I was very surprised visiting Australia last year how many strange looks I got when I said 'sign' at the cash register when the clerk asked 'Pin or Sign?'

    It's very different here in the States, where the question is 'Credit or Debit?' I had no idea what the clerk was talking about at first, and someone had to explain that it's common for credit cards to have PINs in Australia.

    In the States I don't use my debit card for retail purchases at all (the recent Target breach being a good example of why) and my credit card doesn't have or require a PIN, as far as I know.

    I guess it makes sense to add an extra layer of security, and I wonder if the U.S. will ever transition to the same standard. The CC signature might be leftover from the days when people used to feel comfortable writing checks at retail locations, and it seems a bit anachronistic now.

    Also, this seems like a good opportunity to mention that the States is still the only Western nation with a boring single-color paper currency. Maybe livening up the currency color scheme will stimulate the economy?
    howell.b1@...