Leumi Card will launch its "smart" credit card next month, considered safer than regular magnetic stripe cards currently in use, becoming the first Israeli company to issue the next generation product,
"The use of smart cards and the deployment of the supporting infrastructure will reduce damage caused by credit card fraud by 50 percent," said Arieh Heilweil, chief executive officer of Leumi Card. "We are looking to launch the product in July and expect to have 100,000 customers using it by the end of the year."
Also made of plastic, a smart card is a credit card with a built-in microprocessor and memory chip that is used for identification or financial transactions, enabling it to transfer data to and from a central computer and allowing for applications which extend beyond financial transactions.
Some of the card's safety features include the ability to be programmed to self destruct if the wrong password is entered too many times and the requirement that users enter a pin code instead of signing a slip when making a purchase.
The company said the technology is particularly applicable for people who travel abroad frequently where smart cards are in common use.
Since the introduction of smart cards in Britain in 2003, credit card fraud in the UK has fallen by 13% in 2005, Leumi said, quoting data provided by the UK Payments Institute (APACS). Fraud resulting from forgery decreased by 25%, while illegal transactions made on stolen or lost cards dropped by 22% in the two years of smart card use in the UK, Leumi added.
Leumi Card said it is not charging customers to make the switch from their regular cards and expects to have half its customer base, which now stands at 1.25 million, using smart cards by the end of 2007.
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