Bahrain's banks launch new cards to decrease card fraud

According to a senior banker, cases of card fraud are set to drop in Bahrain following the mass rollout of chip and PIN technology. All new credit and debit cards issued by Bahrain's banks must now come equipped with a microchip, which stores all of the cardholder's data, and with its own six-digit Personal Identification Number, which can be changed by the user and which must be entered every time a transaction is made.

Under the Central Bank of Bahrain`s order, all banking institutions must adopt the technology from June 30 or risk penalties. It hopes it will eliminate certain types of card fraud, such as the recording or copying of magnetic strips that appear on debit and credit cards. Besides, the CBB mandated all banking institutions to move to the EuroPay, MasterCard and VISA infrastructure.

Bahrain Society of Bankers chief executive officer Robert Ainey said that although the vulnerability of the magnetic strip would still be present in the new generation of cards, consumers in Bahrain would be better protected if their cards were used fraudulently. As in this case, the issuing bank would have the absolute right to charge-back the fraudulent transaction from the merchant`s bank.

In addition, technically debit and credit cards could be stored on one piece of plastic, as the new cards have the potential to be used for multiple applications. Another big advantage of the card is the capability for banks to issue small, calculator-shaped devices that can be used to authenticate online banking and retail transactions from the comfort of the consumer's home.