French Banks Introduce More Secure Smart Card

French banks continue their status as one-step-ahead of counterparts elsewhere as they roll out a more secure form of smart card. Banks in that country were the first in the world to use smart cards as a deterrent to counterfeiting. However, counterfeiters have caught up in their sophistication so French banks, starting with Crédit Mutuel, one of the country's largest banks, are launching a card with a new level of security.

Most traditional smart cards use something called "static data authentication." However, counterfeiters have learned to copy account information and cryptographic data from legitimate cards, put it onto fake cards, and use the pirated cards at machines that do not connect to a bank for authorization. The new type of protective technology is called "dynamic data authentication." It creates a special digital signature for each transaction - a signature that counterfeiters cannot make. The new technology was made possible by less expensive chips.

Copyright © 2005 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 15, No. 7, 7/05