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A small community bank in California is jumping into the chip card market with a new card powered by the Star Network, that leverages existing contactless terminals to offer a more secure debit transaction. Fremont Bank will begin introducing their new debit chip card into a limited market by the end of the year. This new card product aims to place actual cardholder data behind a protective wall offering a similar value proposition as online payment schemes that operate in much the same way.
Real cardholder data from the STAR CertiFlash transaction is not stored in the merchant’s systems or transmitted when the transaction is processed. If the information that is transmitted was stolen, it would be useless for additional transactions. As an added layer of security, cardholders are required to verify their identities by entering PINs for transactions over $25 or those that contain cash back.
The catch is that the chip only works in a contactless environment and relys on a good, old-fashioned mag stripe as its fallback. However, programs like this one will help to begin educating consumers on how next generation payment forms will operate, making the eventual migration from card to other form factors a bit less daunting.
Read full article: http://www.finextra.com/News/Announcement.aspx?pressreleaseid=40179