Magazine article American Banker

Visa to Introduce Small POS Terminal in Bid to Cut Credit Card Fraud Losses

Magazine article American Banker

Visa to Introduce Small POS Terminal in Bid to Cut Credit Card Fraud Losses

Article excerpt

NEW YORK -- Visa U.S.A. has announced plans to introduce a small, inexpensive point-of-sale terminal that authenticates account numbers of cards and also handles the usual authorization procedure.

The terminal, which automatically reads the account number encoded in the card's magnetic stripe so it can be compared to the embossed number, si disigned to combat losses from counterfiet and altered cards.

Counterfeit and altered cards accounted for 20% of Visa's $112 million in fraud losses in 1983, a Visa spokesman said. The new terminal is Visa's latest effort in a series of moves to reduce those losses.

The new terminal, to be available to member banks in the fall, is about the size of paperback book and looks like a pocket calculator, said Bill Bytnar, project administrator for Visa's point-of-sale development.

Visa said its members are already committed to more than 3,000 of the terminals, which sell for $150 and are designed to Visa's specifications by Veri-Fone Inc. of Honolulu. Costs for point-of-sale terminals generally range from $300 to $500.

Like most point-of-sale terminals, Visa's uses a card reader. When the store clerk runs the card through the reader, the display screen shows the account number recorded in the magnetic stripe. If it does not match the number embossed on the front of the card, the clerk knows that the card has been altered.

The new unit is also useful in detecting counterfeit cards, because they frequently do not have real magnetic stripes, Mr. …

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