Will smart cards deter fraud?

Will smart cards deter fraud?

Smart cards, long expected to secure portable information and eliminate fraud in electronic commerce, are susceptible to cracking, Secret Service special agent George Ryan told an audience at this month's e-Gov conference in Washington.

Appearing with Visa International vice president Dennis T. Brosnan, Ryan said the Secret Service works closely with banks and credit card companies to reduce the nation's $600 million annual losses from credit card fraud, theft and counterfeiting.

'We haven't seen any transactions snatched going over the Internet,' he said. 'It's a small percentage of transactions so far.' At greater risk are birth dates and Social Security numbers stored on Web sites' back-end systems, Ryan said.

He predicted fairly slow adoption of smart cards because merchants would have to install multiple types of readers. When an industry standard does make the smart card more prevalent, 'criminals will start working on that, too,' Ryan said.

Smart-card algorithms are being cloned by criminals in France, where the cards are in wider use, Brosnan said.

'Tony Lee Orr, William Jackson, Shruti Dat' and
Susan M. Menke

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