The Financial Information Service Co (FISC,
Normal ATM cards are easy to duplicate by copying the magnetic strips embedded in the cards, while IC cards with multiple encryption systems are extremely difficult to copy, said Pan Wei-jong (
"We expect ATM cards will completely disappear over the next five years," Pan said. "ATM card fraud will be largely reduced by that time."
According to an agreement reached by Financial Information and Bankers Association (
Another 52 banks launch the new cards by next June, Pan said.
Although IC cards are technically more secure than magnetic-strip cards, Cheng Jen-hung (
One example Cheng provided is a business scam which was uncovered last September within FISC itself.
Three of FISC's employees leaked confidential information to criminal groups involved in making fake cards. More than 1 million card numbers were leaked, resulting in at least NT$3 billion in unauthorized charges on consumers' cards.
The company recently decided to pay NT$230 million to 49 banks that suffered losses from the incident.
"Banks that issue IC cards should improve management of card holders' information," Cheng said. "The risk may also come from aspects other than technology."
Another problem associated with the plan to upgrade the card is the automated-teller machines. Currently, there are around 7,000 out of 17,000 machines in the nation that can read IC cards, and 10,000 will be gradually installed with the reader to facilitate the measure, Pan said.
The total cost for installing the new machines or IC readers is an estimated NT$1 billion, according to Chinese-language newspaper reports.
In addition to replacing ATM cards, the company is also planning to develop IC cards into smart cards over time.
Smart cards can be used to make payment in various shops such as convenience stores, gas stations and movie theaters, as well as to be used as phone cards and subway tickets.
"Due to its convenience for making transactions, the cards can further spur on consum-ption," Pan said.
"In addition, the card-replacement plan is expected to bring more business opportunities for local electronic manu-facturers," he said.
The manufacturing of the IC cards and card readers will create NT$40 billion in revenue for the industry, reports said.