Skimming Fraud – HDFC Replacing Merchant Terminals – What about Malware Infected Retailers ?

Malware-Infected-Retail-Card-MachinesHDFC Credit Cards, India’s Largest Issuer of VISA & MasterCard Credit Cards, with a portfolio of 6.4 Mn customers, in its internal investigation has found few Merchant Terminals where security was compromised and is thus replacing the same with newer ones. The Bank did not share the number of swiping machines that will be replaced. HDFC Bank has an installed base of 250,000 merchant terminals across India.

Skimming is the process of extracting Customer & Credit Card information stored on the Magnetic Stripe of the Card. Cards equipped with Chips are far more secure and is not an easy task to skim the information from such cards. RBI has mandated that from July-1st-2013, all merchant terminals must be capable of accepting Chip based cards. An alternative of Magnetic Stripe will also be provided, however, insist the merchant to use the Chip interface so that you will have peace of mind for that transaction.

Caution of Using Cards at Malls / Retail Chains
It is commendable that HDFC Bank has acted swiftly and has come to the rescue of the Card eco-system. However, investigations by RBI has also revealed that World’s smartest hackers may have installed Malware at Retail Stores Credit Card Point of Acceptance from where they are accumulating Card Data. Will Indian Retailers spend Money to secure their systems and customers’ information ?

Mr. Parag Rao of HDFC cards said that overall fraud in the country is just a tenth of what is observed in the developed world and so far has no bearing on the delinquencies of the cards portfolio of the bank which stands tall at Rs 10,000 Crore.

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