Gulf banks pushed to adopt higher security credit cards

Banks are rolling out measures to boost security features on credit cards in a bid to minimise the risk of fraud.

Growing concern over credit card fraud in the region is pushing the financial industry to boost security.

Citibank is in the process of rolling out a "3D secure feature" on its credit cards for the first time in the UAE. When the new layer of protection becomes available next month, customers will be asked to create a secret password and use it each time they purchase products online. The bank is also working on chip-enabled credit cards, which are gaining traction in around the world.

"When the recession came along, we started seeing a lot more fraudulent behaviour on our cards than in previous years," said Faraaz Ali, the head of the cards division at Citibank in the Middle East and Pakistan. "We are looking at passwords that dynamically change, where you'd get a unique password each time. That's a possibility, but the preferred solution would be to send the password to a mobile device. That's phase two."

The "3D secure feature" is not exclusive to Citibank. First Gulf Bank launched an internet credit card in the autumn that provides a personalised password for every online transaction. The authentication is supposed to ensure the card cannot be misused online, even if it is lost or stolen.

Part of the industry's reason for adopting newer technologies, experts say, is due to persisting fears consumers have about using credit cards to make online purchases - whether through a desktop computer or the growing number of mobile devices.

More than 75 per cent of consumers in a global survey released in October by Juniper Networks, a software and computer networking company, said they used smartphones or tablet computers to access sensitive information, including the sharing of credit card numbers and accessing credit card statements.

"A lot of people are still wary of using e-commerce and credit cards," said Jawad Abbassi, the founder and general manager of the Arab Advisors Group, a research consultancy based in Jordan.

Mr Abbassi said hurdles remained within the business community. In the Mena region a report by his firm found more than one third of the e-commerce portals available still did not offer a credit card payment option for purchasing products online.

Companies such as Visa and MasterCard have been pressuring banks to keep adding security features. This month, a representative from Visa met industry partners in Dubai to discuss the shift towards businesses using chip-enabled credit cards and deploying one-time passwords for online transactions. MasterCard teamed up with Symantec and NagraID Security and created a new kind of credit card that launched in the US last week. Known as the MasterCard "display card", it features a small, built-in LCD screen shoppers can use to generate a one-time password for protection against online fraud and identity theft. Another version of the card enables consumers to enter a PIN before a one-time password is displayed, providing an even higher level of security.

"If you're doing an online transaction with your credit card, now you've got the user, the credit card and the one-time authentication to the bank," said Justin Doo, the security practice director for emerging regions at Symantec, the security firm.

But, while the display credit card was recently piloted and released in Europe and Asia, can customers expect banks in the UAE to offer it? "Once we take that technology to the banks then, yes, for the banks that want to adopt the technology," said Mr Doo.