Sampath introduces POS terminal line encryption

Hemanthi GURUGE

Sampath Bank PLC has invested in new security software commonly known as POS Terminal Line Encryption, to encrypt the transaction data transmitted from their Point of Sale (POS) terminal network, across the island in a bid to avoid card frauds, committed via telephone wire tapping.

When a debit or credit card is used for a transaction at an online POS terminal, transaction information is transmitted to the bank via a telephone line, to obtain authorization and to perform settlement. The transmitted data contains information uniquely identifying the card (account information) and other data required to complete the transaction. Criminals, using a process known as 'wire-tapping', illegally intercept the transaction data en-route between the POS terminal and the acquirer's host system. They electronically tap into the telecommunication line between POS terminal and acquirer host and then capture the data. The account information data is then extracted from the captured messages and used to create counterfeit payment cards to make fraudulent purchases.

Sampath Bank Card Centre Chief Manager Nirosha De Silva told Daily News Business that a large number of credit card fraud incidents have taken place across the country as well as the world due to wire tapping.

De Silva also said that wire-tapping has been a very popular modus operandi for skimming in South East Asia. Malaysia was affected in 2003, and their Central Bank mandated Line Encryption, thus eradicating the possibilities of counterfeiting cards through this method. Fraudsters soon moved to other countries, Sri Lanka being one of them, and it remains a major threat to the card industry. The recommended solution to counter wire-tapping is to encrypt the sensitive card track data from the Point of Sale (POS) to the acquiring host.

Until such time all issuing banks issue CHIP cards and acquiring banks install CHIP enabled POS Terminals, this threat will continue to remain. The Central Bank of Sri Lanka has mandated that all acquiring banks should implement the line encryption solution, by end December 2011, thus eradicating the possibilities of counterfeiting cards through this method.

Sampath Bank PLC has installed this system in their 4,000 terminals to safeguard the card data, not only of their Cardholders but also of Visa and MasterCard Cards issued worldwide.