New PIN Systems May Prove Detrimental for Online Credit Card System

By | May 14, 2012

You do not want to pay the price of something you are not responsible for. Especially when it comes to credit card frauds, there have been instances in the past where people have borrowed loans, personal loans etc just because they didn’t report a credit card theft on time and when they noticed it was already too late. With the introduction of the Personal Identification Number for all online credit card transactions, the credit card industry has kept its distance from this revolutionary change which is said to transform the way its online counterpart will function. Only 20% – 30% of credit card users have signed up for this system, although banks have been trying hard with aggressive promotional campaigns via mobile phones and emails, in order to convince users to sign themselves up. Banks however remain optimistic stating that they are expecting an increase in turnout for the new online credit card system over the next few months.

Banks have been sending out SMS alerts and emails over the past few months, and many have even recorded quite a lot of good feedback and response on this new security feature. Customers have even been given the flexibility to register themselves for these personal passwords on the bank’s website as soon as they can, in order to avail the maximum benefits of this safety guideline, which was introduced in accordance with the guidelines of the country’s central bank, the Reserve Bank of India. The Reserve Bank of India had ordered all banks in the country to implement a two factor system of authentication. This was a move to ensure that all transactions were carried on a safe platform, in a secure manner, without leaking out any private information or credentials to hackers and other cyber criminals lurking in the corners of cyber space. Earlier the concept of having an additional password was a voluntary decision and customers had the freedom to sign up for one or not. However, with the new guidelines of Reserve Bank of India out, all credit card users who prefer to use the online system of banking are required to sign up for this additional password. Although it is just the matter of a single password that is required to be added, on the insistence of banks, various other features like a one-time password for all transactions can be expected to be introduced in the near future.

Prominent global credit card houses had already introduced the system of a PIN for all online transactions in order to get users accustomed to this practice. Customers were required to have their own password for all online transactions, which wouldn’t be mentioned on the credit card. Thus, such a password would be a private one, which would be shared between the safe boundaries of the merchant establishment, the bank and the credit card user. This practice has become especially necessary in today’s world, where people make big value purchases within the vicinity of their home, for a wide variety of products ranging from travel bookings, hotel reservations, dining, as well as regular utility bills as mobile or telephone bills. As a result, there is an increased need to make net banking a safe and secure platform for all online transactions, in order to protect and increase the growing popularity of the online credit card system. Since many people are still very cautious to rely on the online forum of credit cards, this two-stage security system will reduce the possibility of any fraudulent attempts or malpractices via credit cards online. Most hackers will only be able to go through the first stage of username and password, and will be unable to break thorough to the next round of credentials. Customers must comprehend the importance of such a security system, and must sign up immediately to enhance their security features. Remember to keep a password that is a combination of letters, characters and numbers, to make a password that is difficult to crack.

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