Bank card vs. Smartphone: What is the difference?

Although debit card fraud has decreased in South Africa, credit card fraud has risen to an annual loss of R436.7 million.

This is according to the 2017 Card Fraud Stats, which was released by the South African Banking Risk Information Centre (Sabric) in April this year.

The majority of credit card fraud is a result of card-not-present (CNP) fraud, which occurs when criminals make online purchases with stolen personal information.

The second-most common credit card fraud is counterfeit card fraud, which was responsible for a loss of R83.6 million between 2016 and 2017.  

Otherwise known as card skimming or cloning, this is when criminals copy your card information onto another card and use it without your knowledge.  

Nowadays, South Africans are opting for safer alternatives, such as contactless cards – cards you can simply tap, rather than swipe or insert – or paying with their mobile phones.

Justin Hume, director of Integrated Mobility at Samsung South Africa, points out that traditional card fraud can be avoided when paying with your mobile phone.

Referring to the Samsung Pay app, which is available on selected Samsung Galaxy smartphones, Hume explains that this new technology involves using tokenization from VISA and MasterCard.

Instead of using your personal banking details, the Samsung Pay app creates a new token for each transaction, which is useless to criminals in the unlikely event that it’s intercepted.

“This means your actual card information is never used. The cryptographic information also changes with every transaction, making each transaction unique,” says Hume.

Even if criminals were able to “skim” the data from your cellphone, the information would not be your actual card details and their efforts would lead nowhere.

Hume explains that Samsung Pay has additional safety measures such as fingerprint, iris, or PIN authentication on your smartphone to personally approve each transaction.

Other drawbacks of using cards include the typical wear-and-tear on the card chip, which will cost you both time and money, and having to scramble for your card at each till point. 

“You usually have your phone with you, so you no longer need to search through your wallet when you want to make a payment,” says Hume.

The Samsung Pay app also allows you to load all your loyalty cards onto one secure place, where you can access them all and use them with ease. 

“Paying with the app is as simple as swiping up on your compatible Samsung smartphone, authenticating yourself, and holding your phone next to the payment terminal,” says Hume.

He points out that new technology allows you the ability to pay on virtually any payment terminal, new or old, making it the most widely accepted mobile payment app.*

* 97% acceptance rate based on local trials. Terms and Conditions Apply.