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(ii) Cards lost, stolen or intercepted before receipt by the genuine card holder
Using the PIN to identify the cardholder combined with the chip''s ability to verify that a card is authentic will drastically improve security. But even the smart cards are equally vulnerable to theft. Bankers and customers both have duty to keep the card and PIN safe, the former should be in care with the card and PIN are initially transmitted to their customers, and the latter protect them thereafter. For the banker, the code of good practice is necessary dealing with the issue of cards and PIN, firstly, there should be a general requirement on banks to take every reasonable care when issuing cards and PIN to customers, and furthermore, a requirement that the customer’s acknowledgement of receipt of card and PIN must in turn be receive by the bank, before the service for which he needs them becomes available to him. Transmitting the card and PIN to the customer through the post is a traditional way in UK, however, is also vulnerable to exposing the customer to risk.
More cases of misused card occur after the customers handle the cards and PIN. The need for care of the card is simple and obvious. The express contract with the provision that requires customers to take every reasonable care at all times in handling their cards and PIN, and give notice to the card issuer as soon as they found card was stolen.
The legal position of payment cards are not only governed by the general law but also, to some extent by the Customer Credit Act 1974, however, it has been anachronism. Considering the rigid statute will restrict the rapid development of the technology, and the competition between the banking businesses, a “two-tier” approach that restricts statute law to a few key issues common to payment cards, reserving for standards of best practice those more detailed issues that bear on specific systems or technologies, should help to preserve flexibility.
(II) Remote Payment (On-line Payment)
The wider impact of e-commerce, the amazingly rapid success of companies like Amazon, Yahoo and eBay, has prompted the invention of several payment instruments to help facilitate the completion of business transactions over the Internet, including credit/debit payment on-line, direct debit, Mondex, Visa Cash, Digi cash, internet banking, etc. The Security of data and personal financial information of customer is one of the most important concerns of on-line payment.
(i) Credit card payment on-line
To complete business transactions online, many different payment systems, ranging from credit card, e-cash, to most recently introduced e-wallet and e-charge, have been tested. Among those tools, the most commonly used one is still the credit card. The main advantage of credit payment on-line is that credit cards are a familiar method of payment for most customers and as no special plug-ins or equipment are required to be installed by the consumer, it makes it easy to shop on-line even for the first time on-line consumer. This payment method, however, has also become the major barrier for the continuous growth of the Internet commerce.
According to a recent survey conducted by Business Week/Harris Poll in the US, more than 80 percent of online buyers worried their credit card information might be used by some one to make purchases without their consent.
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