SAFE CARDS

One of the popular methods of increasing transparency of economy and fight against its shadow elements in the world is the development of cashless payments. The effect of this process on GDP is high enough: thanks to the development of cashless payments in Azerbaijan over the past five years (2011-2015), the GDP growth was 0.03%, or $70 million. International experts believe that this market has still high potential and it makes Azerbaijan one of the largest markets in the region on a par with Belarus, Bosnia and Herzegovina, Georgia, Kazakhstan, Serbia and Ukraine

Director of Visa’s Risk Management Operations in the CIS and South-Eastern Europe, Larisa Makarova, shared her vision of development of cashless payments in Azerbaijan in her interview with R+. 

- In recent years, Azerbaijan has done a lot work to develop the cashless payments. How successful were these efforts?

- It suffices to say that Azerbaijan is one of the leading countries in the CIS and South-Eastern Europe on 17 indicators of development of electronic systems. With 95% of chipization of all bankcards, Azerbaijan is among the leaders by the level of introduction of chipped e-cards. These positions are further strengthened with the launch of the principle of zero liability (Visa Zero Liability) in Azerbaijan, which protects consumers from unauthorized transactions and holds the banks fully responsible for the security of clients. Simply put, the safety of deposits on bankcards will be the same as the level of guarantees for ordinary bank deposits. Obviously, this will further enhance credibility of banks and expand the scope of deposit application.

Here is an example: let us suppose the owner of a bankcard was abroad, made purchases in retail chains, and left card data in them. Upon return, he found that the money disappeared from his card, which is an evidence of fraud. He notifies the bank that, based on disputable procedures, decides the eligibility of its client for damage compensation. While according to the zero liability principle, the cardholder suffering from an action of fraud shall be presumed innocent.

- To what extent the cashless payments in the world are secure given the growth of cybercrimes?

- It is worth noting that the security of cashless payments has evolved late in the countries with developed industry of bankcards. Currently, there is vast experience in introducing new products and security in this area. Advantages of the countries where cashless payments only develop, for example Azerbaijan, is that these countries are in parallel with the products to get modern security tools.

So, oddly enough, the highest level of card fraud is observed in the US, where the cards were introduced in mid-1950s. At first, the electronic cards were widely popular, and only then the developers started thinking about protection technologies. Azerbaijan enjoys one of the best systems of protection against fraud and theft with e-cards. In fact, this technology has been introduced in the CIS recently. Almost simultaneously with electronic cards. Therefore, the level of fraud is miserable: 3 cents per $100 of fraudulent transactions. This is two times less than the global average - 8 fraudulent cents for every $100 payment by card.

- What are the benefits 'zero liability principle' for banks?

- First of all, as I have already noted. An even greater expansion of cashless payments and banking card market, which undoubtedly has only a positive effect on improving the quality of banking services. So, thanks to electronic cards, the banks can offer the most interesting products to their customers. Because the bank has the ability to track what and where the clients buy, how often they travel abroad, what transportation they use, what brands they prefer, etc. Accordingly, banks base their offers on customer preferences.

- Payments through smartphones are getting increasingly popular in the EU. What about Azerbaijan?

- This method of payment has a bright future. Soon or later, telephone payments will replace plastic cards. But even this technology is rooted in the past: the customers use electronic clocks, rings, etc. for payments in the developed countries. This type of payment is also safe, as developing the new technology, we are also developing a system to protect it. Currently, the card number, which may be vulnerable, is replaced by a 16-character symbol that is not the card number. Even if these symbols are compromised, then they will not pass in a trading network. Because these symbols are tied to your smartphone, watches and so on. There is a dynamic shift of data on cards. Even if the fraudster has stolen your data, then: a) they cannot make a payment, b) the symbols are effective for a few seconds, the next transaction with this data is not possible.

Azerbaijan has all conditions for the development of payments through smartphones. All POS-terminals used in commerce, restaurants and other facilities are provided with system for payments via smartphones. Rest assured, wherever you use your card, you can easily make a payment with your smartphone.

- How can we protect ourselves from fraud when using bankcards?

- I personally recommend cardholders to use a chip card supported by security technology through the Internet, and make sure that they are signed up for SMS banking. No worries under these conditions. If they do not follow these simple rules, be prepared for threats. For example, today widespread duplication technology in the application of a magnetic strip chipless cards for non-cash payments. Fraudsters are developing, too. If the user chip card, but there is no subscription to internet banking, it does not receive a one-time password. And that poses a threat on the internet at the calculations. It is also of great benefit if the card holder is subscribed to SMS-notification of transactions in real time. He can know what is happening with a card. If, say, he lost it, and the finder performs illegal transactions with his card, the true owner can immediately know about it and block the card.