The Hong Kong Monetary Authority (HKMA) has ordered seven banks to stop issuing credit cards with contactless payment function after security loopholes were found in their systems.
The banks were also ordered to notify existing cardholders about the security risks, recall problematic cards and offer card replacements to rectify the situation.
The authority said the banks failed to meet the standards set by the financial watchdog in 2012, particularly to guarantee that only information for transaction may be read and not the cardholders’ full names and other private data.
Apple Daily, citing unnamed sources, identified the seven banks as Bank of China (HK), DBS Bank (HK), Bank of Communications (HK), China CITIC Bank International, Industrial and Commercial Bank of China (Asia), Dah Sing Bank and OCBC Wing Hang Bank.
Fraud cases may result from the security loopholes in the contactless payment system, which, through an embedded chip in the card, allows users to make transactions by just waving or tapping the card or handheld device over a reader at the point of sale terminal.
The authority said banks are required to conduct a thorough review of the security of their contactless credit cards as tests had shown that such cards using near field communication (NFC) technology could put cardholders’ private information at risk of being stolen by hackers.
The contactless credit cards, which are issued by 11 banks in Hong Kong, can be used to settle sums of less than HK$1,000 (US$129.03) through card reader apps.
A customer service representative at Bank of China (HK) said it has no plans to replace its contactless credit cards at the moment.
DBS Bank (HK) said customers can ask for a replacement of their contactless credit card with one that has no tapping payment function.
Both Bank of Communications (HK) and China CITIC Bank International said they have already suspended the issuance of new contactless credit cards.
The HKMA has informed the Privacy Commissioner for Personal Data about the issue.
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