BBVA Bancomer will be the first bank in Mexico to issue smart cards in an attempt to reduce fraud and eliminate card skimming.
The bank will set up EMV (Europay MasterCard Visa) terminals, designed by VeriFone for smart card use, in 10 retail locations throughout Mexico over the next few months.
Smart cards are rapidly becoming popular in Europe, Latin America, Asia and Africa-regions hampered by growing fraud losses and rising operational costs. Indeed, a smart card addresses both these issues thanks to its embedded computer chip, which gives it multi-use capability (it can be coded for telephone, ATM and other electronic uses) while simultaneously improving protection against identity theft and card counterfeiting.
Although smart cards are more costly to distribute than magnetic stripe cards, they provide more fraud protection, experts say.
"The cards are more secure than magnetic cards," said Michelle Graph, director of global marketing at VeriFone.
The BBVA Bancomer smart card implementation, though seemingly modest, will mark one of the first widespread placements of the technology in North America.
Although many experts believe smart cards will become a dominant delivery vehicle, the technology has yet to really catch on in the United States and Canada. Smart cards will make substantial inroads into the North American financial system and have a greater incidence of consumer use and acceptance by 2006, experts predict.