The Banking Code of Practice may protect the individual cardholder against losses on a Chip and Pin card, however in the long-run, it is us all, as banking customers, who will have to pay. This story is yet another example of how fraudsters, who always take
the line of least resistance, can exploit opportunities in those countries that have not yet adopted Chip and Pin, highlighting the need for alternative fraud prevention technologies to be in place.
For those with Chip and Pin, as a first line of defence, it appears to have worked, at point of sale. Fortunately card issuers realise that it has limitations and have invested in fraud detection/prevention systems. The ability to authorise, refer or decline
a transaction has to take place in real time, and be based upon robust models that are current and accurately reflect customer expenditure profiles and issuer fraud experiences. To be really effective it needs to check 100% of transactions, and not just a
nominal percentage. When Banks make the investment in these kind of sophisticated, advanced systems that continually improve their models, then they will be protecting their customers, their shareholders and themselves.