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Innovation

Keycorp: Mag-stripe gone within three years

Magnetic stripe cards are on their way out the door, according to electronic transaction solutions provider Keycorp. Keycorp is predicting Australia will make its transition from "mag-stripe cards" to smartcards within three years.
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Written by Kristyn Maslog-Levis, Contributor on
Magnetic stripe cards are on their way out the door, according to electronic transaction solutions provider Keycorp.

Keycorp is predicting Australia will make its transition from "mag-stripe cards" to smartcards within three years.

The security solution supplier claimed the transition to smartcards in Australia would be driven by increasing incidence of card-related fraud activity.

According to Keycorp chief executive officer, Bruce Thompson, card fraud is migratory and its perpetrators are already starting to make their presence felt here.

"The catalyst for that migration to smartcard to occur is fraud. In certain countries -- where fraud is persistently a major problem -- they are moving very quickly to a smartcard solution. That gets rid of the fraud problem, but when fraud problem is solved in one country, it migrates to another country and we are already starting to see it in Sydney," Thompson said.

However, Thompson conceded that the transition to smartcards would be expensive, requiring an extensive overhaul of existing security infrastructure.

"This transition to smartcard environment is indeed costly in a sense because infrastructure has to be rebuilt," Thompson said.

Thompson claimed that the Australian and United States' banking communities did not currently believe that the fraud problem was big enough for them to make the investment.

However, he believes the banks' attitudes will slowly turn following the example of other countries in the region such as Korea, Taiwan and Malaysia, which have taken steps to make the transition to smartcard technology.

"As migration occurs, which is done essentially as a defensive mechanism, people are starting to see the benefits of smartcard technology -- so it is not just for fraud prevention," he said.

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