BNZ, ANZ chips in for smart cards

The Bank of New Zealand will begin issuing smart credit cards with built-in microchips by the end of the year.

BNZ spokeswoman Dee Crooks says it is "in the process of developing chip functionality" for a range of its credit cards.

ANZ National spokeswoman Jessamy Malcolm Cowper says it introduced smart travel cards in November and will begin upgrading all other credit cards this year.

Smart debit and credit cards have been the norm in Asia and Europe for several years, where banks were quick to introduce the technology to combat certain types of fraud, such as skimming.

That involves the theft of customers' bank-card details, which are then copied on to fake cards and used in ATMs and shops.

In New Zealand, where such frauds are rare, banks have been slow to ditch magnetic-stripe cards after struggling with the business case.

Massey University banking expert David Tripe says they will nevertheless need to make the switch under rules imposed by the major credit-card companies.

Unlike conventional magnetic stripe cards, smart cards can have information written to them and updated after they have been issued. When chip cards were first touted in the 1990s, it was assumed this feature would let them replace cash by acting as electronic wallets, and that they would spawn sophisticated loyalty programmes run by retailers, revolutionising the banking industry.

Mr Tripe says it is a good idea in principle, "but if you go to the international experience, not a lot of that is happening".

Bank-issued smart cards could be used in a similar way to Wellington's Snapper card, to pay for public transport, but he says such initiatives had often proved hard. "You need to get so many parties on board."

The BNZ is part of a consortium led by French technology company Thales that was selected last month as the preferred tenderer for an integrated public transport ticketing system in Auckland.

Ms Crooks says the bank is not ready to discuss the intended applications.

ASB cards and payments general manager Rob Campbell says it began to issue chip cards for Platinum credit accounts in September last year, and to Visa debit customers in March. "Over the next 12 months, we'll be rolling them out right across our portfolio to all our products."

Westpac spokesman Craig Dowling says it will issue a chip card for customers next year.

- © Fairfax NZ News