National Australia Bank (NAB) is rolling out technology designed to combat card fraud by automatically updating magnetic stripe security information every time an ATM transaction takes place, according to NZPA.
The "liquid encryption number" (LEN) technology was developed by NAB subsidiary Bank of New Zealand, which now uses it for all credit and debit cards.
By changing the mag-stripe number, the technology helps tackle skimming fraud, where crooks attach devices to ATMs to copy details which can then be used to clone cards.
LEN allows the bank to automatically detect if a card used at one of its ATMs has been copied or duplicated and take action to stop transactions.
According to NZPR, the system has helped BNZ cut the number of fraudulent transactions from cloned cards by 50%, prompting its Australian parent to take it up.
Data released earlier this month from the Australian Payments Clearing Association (Apca) shows that skimming fraud on Australian-issued credit cards has dropped for the first time ever - from $50.1m in 2008 to $37.5m in 2009, a 25% fall.
The drop is put down to the steady roll-out of chip cards by the country's major banks. "Australia's progressive roll-out of chip technology is starting to bite against skimming fraud, which should continue to drop as the use of chip becomes more widespread," says the APCA.
However, skimming fraud on PIN-only debit cards increased from around $5m to $17.5m following a spate of attacks on merchant terminals in 2009.
New software to beat credit card fraud - NZPA