Transaction Network Services (TNS) today announced that it has entered into a contract with Northern Rock, enabling the UK's 9th largest bank to introduce Chip & PIN ahead of the liability shift in January 2005.
From January 2005, banks, retailers and ATM operators will bear the costs of credit and debit card fraud, if they are unable to process payments using the new technology.
TNS will transmit, authorise and process chip-card payments made by Northern Rock's customers in retail outlets, at cash machines and via VISA and LINK.
This means Northern Rock's customers will be able to make payments at the three in four tills, which, according to the Chip & PIN programme, will be able to process Smartcard transactions by December. Through its use of the TNS services, Northern Rock will be able to match many of the UK's principal banks and building societies in rolling out the new cards.
The contract builds on a 15-year relationship in which TNS has provided an authorisation service for Northern Rock's magnetic stripe cards. TNS transmits and processes Northern Rock customers' transactions at POS and ATMs via its host, verifying cards against information held about customer accounts to authorise or reject transactions.
To support the contract, TNS has invested in network infrastructure, as well as leased line connectivity, to accommodate the anticipated increased transaction volumes and message sizes associated with the phased migration of terminals to Chip & PIN.
Implementing new Pin Management Services (PMS) and Eurocard, Mastercard and Visa (EMV) script engines makes it possible to authenticate the card and cardholder details giving added security, and to upload PIN management data to keep the details on the card in step for use online. Downloading of EMV scripts to cards also makes it possible to alter operational parameters on the chip without recalling or replacing the card, leading to significant savings in cost.
Alan Stephenson Brown, VP, UK Sales, TNS, commented: "The project is a testimony to all parties involved and the capability of TNS' network to adapt ahead of the market to support new payments technologies. It clearly puts TNS in a strong position to transport and process other Smartcard transactions."
Dave Bradley, Assistant Director (Savings), Northern Rock commented: "We have been impressed by TNS' commitment to the project, which, working closely with ourselves and the card processing bureau, has enabled Northern Rock to make the crucial migration to Chip & PIN without disruption to service."
Chip & PIN technology is set to combat card fraud from lost and stolen cards, where the transaction is made with the cardholder present. It will also help protect cards against copying or cloning by detecting such cases, when transactions are carried out online.
According to the latest figures from the Chip & PIN programme, fraud from lost and stolen cards currently affects one in three people in the UK. Occurring every 8 seconds, counterfeit transactions cost card issuers £1.1 million per day, with the average card fraud case costing over £600. By using a personal PIN number instead of a signature, the new cards make it more difficult to falsify transactions. In France, the introduction of Chip & PIN has reduced credit and debit-card fraud by 80%.