Africa: Kenyan Banks Switching To Smart Cards

Fraudsters have been exploiting floor limits for approved credit, a concept created by banks to help ease congestion and delays resulting from authenticating each transaction online. Transactions involving amounts below floor limits are authorised off-line and fraudsters operate by making numerous small transactions below these limits in different retail outlets to avoid detection. Chips offer greater security and convenience because all information is stored on the chip.

Chip technology also minimises skimming, where a small machine called a skimmer is used to swipe a credit card. It copies all the account information, which is then used to create a counterfeit card or several cards that can be used to transact without the cardholder's knowledge. "It is harder to break and copy a chip. Even assuming that fraudsters can skim the chip, they still cannot get the PIN, which is stored in the host system," said Mr Njoroge, who is also head of card services at Imperial Bank.