How secure is your credit card?

Credit cards have become an integral part of our life, but concerns about its security and vulnerability is an ongoing issue. Credit card frauds are rising at an alarming rate. Card associations and banks on the other hand have been trying hard to enhance card security features to minimize frauds and misuses.

Here is a look at the security features introduced by card issuers and banks in the current scenario.

Verified by Visa/Mastercard SecureCode

A significant upgrade in credit card security features came with the introduction of 'Verified by Visa/MasterCard Secure Code programme' or second factor authentication. It addresses the credit and debit card transactions over internet.

Earlier, to do an online transaction, the only information needed was your credit card number, expiry date and the CVV number printed on the back of the card. It is easy to obtain this information as they are exposed when you handover your card at hotels, shops or petrol stations. Fraudsters can use this data for online transactions where physical presence of the card is not needed.

With the introduction of the Verified by Visa/MasterCard Secure Code programme, apart from card information, the customer needs to provide an additional password like that of a debit card, to make the transaction secure. This is to authenticate any online transaction.

EMV Chip

The EMV chip addresses security concerns while the card is physically swiped in a machine. When cards are being swiped on an electronic device, all the information stored on its magnetic strip gets extracted for verification. Fraudsters can extract this data from swiping machines and use them to make a duplicate card through a process called cloning. This duplicate card can be used for online transactions and your credit account gets billed.

The susceptibility of magnetic strip cards forced the card associations to come up with an innovative solution - the EMV (Europay, MasterCard and Visa) chip. It stores the data securely in a highly encrypted format which is difficult to skim off and thereby reduces the chances of extraction. It also relies on a digital signature scheme based on public key techniques to confirm the data's legitimacy. As the transaction is being processed, any tampering or unauthorised alteration of data is detected and the transaction will be declined.

India is slow in adding this security feature. In India, the card acceptance mechanism at many merchant outlets is still not equipped with the process. So, the Indian card manufacturers need to issue cards with both EMV platform and magnetic strips. The card makers ensure that the new cards will have a magnetic strip, but the card's confidential data will be stored on the chip. The magnetic strip facilitates the transaction where EMV processing is not available and at the same time data will not be skimmed.
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India food inflation second lowest among emerging economies

India did fairly well on the food inflation front in 2010, as per the Economic Survey tabled in Parliament today, recording a lower rate of price rise in essential items than other major emerging economies of the world, barring the Philippines.

India''s food inflation was the second lowest among all emerging economies in the 2010 calender year and the country also witnessed one of the steepest declines in overall inflation, the Survey said.

It said India''s average food inflation in November, 2010, was 5.4 per cent, far lower than 15.8 per cent in Argentina, 9.2 per cent in Brazil and 11.7 per cent in China, as per data on 15 emerging nations from the International Labour Organisation for the month.

The Philippines recorded food inflation of 3.2 per cent in September, the month for which its data was considered.

Citing data from the International Labour Organisation, the Survey said that while headline inflation showed a rise in other emerging economies, the overall rate of price rise went down in India.

This was more so in the case of food inflation, where India was among the handful of emerging economies to have witnessed an easing in the rate of price rise.

Giving example from individual months taken at random, it showed that overall inflation in India was 8.3 per cent in November, as against 13.5 per cent in the same month of 2009.
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