News from Vasco yesterday that it will soon be selling smartcard readers via the local corner store has interesting implications for Internet banking security.
Such readers have been available in many Asian convenience stores for some time – they make sense in countries where online access to public services is only made available to holders of Government-issued identity cards.
Vasco already sells the readers on eBay for Belgian customers, again because Belgian citizens will soon be required to use an identity card to securely access both public and private institutions.
Vasco is expanding its strategy to include the UK, with plans for retail distribution in other markets down the line.
Whether the strategy works will be highly dependent on local market conditions. For example in Australia smart cards are only just beginning to gain traction. While the UK has already moved to Chip & PIN, Australians are only beginning to learn of the difference
between a magstripe card and a chip card.
One bank that is fond of
using security as a competitive differentiator is ANZ, which is currently promoting the benefits of chip in these
advertisements as a selling point for its credit cards
Most Australian banks have deployed two-factor authentication for increased online banking security – in most cases via one-time password tokens or SMS. Many have avoided moving to card readers, hoping to avoid the cost of deploying the readers and instead
relying on transaction monitoring and point solutions to keep fraud costs to a minimum.
It would only take one or two major banks, or online service providers such as PayPal, to raise awareness of the benefits of smartcards to eCommerce and online banking security. There’s also the potential for electronic document signing which has strong
appeal to financial institutions, particularly those without a large branch network.
Whether consumers will fork out the money required to purchase a reader will depend largely on the cost and the number of services they can gain more convenient access to as a result.