Barclays Bankis to advise all
customers making payments online to use itstwo-factor securitysystem from next
month, in what amounts to a rapid expansion of the
technology.
Barclays' card-reader system, known as Pinsentry, is used by
about 250,000 customers, but it could ultimately be extended to
all 11 million current account holders, the bank said last
week.
Customers who want to set up a new third-party payment will get
a screen warning them that they will have to upgrade to
Pinsentry.
Barclays' electronic banking director, Sean Gilchrist, said the
move was aimed at cutting fraud "significantly".
Figures released in October by UK payments association
Apacs showed that industry losses from online banking fraud
were down 67% to £7.5m, but that card-based frauds where the
cardholder was not present were up 44% at £137m.
Gilchrist said the extension of Pinsentry to address
cardholder-not-present fraud was the logical next step, but
Barclays had no firm plans to do so at present.
RBS/NatWest said this week it plans to issue 1.4 million readers
to its online retail banking customers by the end of the year.
The bank has sent out hundreds of thousands of card readers
since May to businesses and personal customers, but now plans to
send them to any customer who sets up a new payee mandate.
HSBC said it had decided against rolling out card readers to its
online customers because of the complexity of using them. Only its
small-business customers get them if they specifically request
them.
"The process that you go through to get online and shop online
using one of these takes quite some time and is complex. We tested
this with customers, but the feedback was not good," said an HSBC
spokesman.
The bank is trialling another form of authentication, which it
calls out-of-band authentication, where it will call customers and
ask them to confirm a personal identification number.
A spokesman at Apacs said that any form of fraud prevention was
good news, but the choice of systems varied because of the
different fraud profiles of high street banks. "The banks that are
not issuing these may not be experiencing as much fraud," he
said.