MALAYSIA is first in the world in completing a migration to high-security, chip-based credit cards, and this has almost eliminated the incidence of fraud.
Shuan Ghaidan, an official of MasterCard Asia Pacific, said Malaysia was first in the world to complete a migration to Europay-MasterCard-Visa (EMV) technology.
Malaysia completed the switch to EMV in May, ahead of Taiwan, South Korea and Japan, which will complete the migration at the end of this year.
Jim Cheah, MasterCard senior country manager for Malaysia and Brunei, at a regional MasterCard conference in Taipei yesterday estimated that card issuers and merchants in Malaysia spent about RM200mil for the EMV migration. Since the completion of the migration to chip-based EMV cards and readers, the incidence of fraud has dropped by 96%.
The reason why fraud has not been completely eliminated is because petrol stations are still in the process of making the changeover to EMV. Malaysia is the only country in the region where customers can use their cards at the pump whereas in other countries petrol stations accept cards only at the retail counter.
I wouldnt say that its impossible to commit fraud on an EMV card, but it would not be cost efficient for the syndicates, Cheah said.
The change to EMV required a high cost upfront but it was a good investment because before that, the industry suffered losses of about RM120mil a year from fraud.
The incidence of fraud was about 30 basis points or 0.3% of transactions, one of the highest in the world.
Meanwhile, Southern Bank Bhd received the platinum award while Malayan Banking Bhd got a gold award from MasterCard yesterday for their EMV migration programmes. Hong Leong Bank Bhd also received an innovation award from MasterCard.