Gemalto, a supplier in digital security, announced that it is teaming up with two banking technology suppliers to help banks in Venezuela move to a new, high-tech smart credit card that will better protect their customers from fraud and identity theft. Gemalto declared an exclusive business alliance with Corporación Cardtech, Venezuela's largest supplier of magnetic stripe bank cards, and Newtech Solutions, a consulting and technical support organization that specializes in EMV. EMV is the global standard for banking cards, supported by all of the major international credit cards brands.
Under the new agreement, banks in Venezuela working with Corporación Cardtech and Newtech Solutions will have access to expertise, consulting services, smart cards and technology from Gemalto, a provider of EMV cards (Source: Frost & Sullivan and Nilson Report). The partners estimate that eight million EMV cards will be issued in the first year, starting in June 2009. Close to 16 million debit and credit cards are currently in use in Venezuela.
Venezuelan banks are faced with increasing card fraud, mostly due to illegal copying of magnetic stripe information to create "cloned" credit cards. The problem, that affects all of Latin America, has led to a liability shift which penalizes card issuers and merchants that do not issue or accept EMV cards. This liability change for non-EMV cards becomes effective in Venezuela starting July 2009.
EMV cards embed a microprocessor and software with security features that work together with the payment transaction authorization network to prevent card fraud and identity theft and better protect consumers. Unlike with magnetic stripe only cards, smart cards based transactions cannot be easily cloned, which is a primary source of fraud throughout Latin America. The software loaded in EMV microprocessor cards not only increases security, it opens the door for banks to deploy other exciting programs for their customers, such as loyalty schemes that enable merchants to offer rewards to their best customers automatically when they shop at their store.