Absa begins roll-out of Visa chip cards

South Africa has joined the global migration to a new generation of Visa chip-enabled cards, with Absa being the first bank to roll-out the cards to their customers. A joint press conference hosted by Absa and Visa International, demonstrated how the cards, which contain a chip with a microcomputer, work. 

The Visa branded Absa chip cards are capable of supporting multiple applications and data securely and can make cardholder-specific decisions, such as approving or declining transactions.

"The microchip on the smart card can store a significant amount of information and has a much greater processing ability than the magnetic stripe. This cutting edge technology has an application beyond just banking and we are proud to be the first bank to bring this to our customers," General Manager, Absa Group Payments Systems, Walter Volker, said.

In line with the rest of the world, the Absa chip cards will employ the global standard Europay Mastercard Visa (EMV) application, to ensure the cards work at all Visa merchants. There are approximately 350 million Visa EMV chip cards currently in circulation around the world, with millions more being issued globally every month.

"Much of the world has made significant progress in transitioning their Visa cards, merchant equipment and payment card systems over to this advanced technology," said Head of Technology for Visa sub-Saharan Africa, Nick Essame. "We are pleased that South Africans are beginning to enjoy the substantial benefits that Visa chip cards will bring to the payment card market."

"As the roll-out is dependent on all banks having their infrastructure, particularly terminals in place, we decided on a gradual issuing of cards to our customers. Debit cards with the imbedded microchip will be issued to selected Absa customers when their old card expires, is faulty, is lost or stolen and they must receive new cards," Volker said. He added that the magnetic stripe on bank cards will not disappear immediately; "This is to enable customers to use cards where the new technology is not in place". 

Benefits of Chip Technology

"Chip technology will offer greater convenience to consumers, provide added protection to merchants and enhance the South African payment card system," Essame said.

Chip technology can securely store and encrypt confidential information. The chip is virtually impossible to copy and has the power to be programmed with spending and usage limits making it possible to authorise transactions offline. Chip technology will enable a host of additional features, including a choice of applications such as loyalty, access control, rewards, and public transit passes.

One significant improvement for the consumer will be the use of a Personal Identification Number (PIN) at the point of sale rather than a signature. 

Chip Cards Tried and Tested

Chip cards have been in use in South Africa for a number of years, particularly in telephone cards used in payphones. All Visa cards in France were equipped with chip technology in 1992.

"All the Absa branches have the technology to read the information on the chips of the smart cards and the new Absa cards comply with international standards set by EMV," Volker said.

Absa can take advantage of the largest customer base of some 8.4 million customers and the largest footprint of 759 outlets and 7053 ATMs. Customers have also access to over 120 000 point-of-sales (POS) terminals in retail outlets countrywide and more than 14 million POS terminals globally.