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News

02 April 2013

Azerbaijani banks have unsatisfied demand for insurance of payment cards

The rapid growth of plastic card turnover in Azerbaijan (in 2012 the number of active payment cards increased by 9.34%) has also led to increased risks for shareholders and issuing banks. In particular, risk of unsanctioned interference into card database.

Despite the reality of such a threat, there is so far neither a sound system of technical counteraction to illegal interference nor insurance in case of interference-related loss. Each issuer tries to solve the problem "separately". At that, it turned out that local insurers are unready to insure such risks.

AccessBank informs that it is interested in insurance of payment cards.

"We even requested from 3 or 4 local insurance companies if they have such an insurance product, but, unfortunately, did not receive a positive response," AccessBank said.

At the same time the Bank has not yet recorded instances of interference with the electronic database of cards.

"We believe that all the banks are interested in the existence of such insurance product in the country, but insurers, unfortunately, are not," the Bank said.

The International Bank of Azerbaijan, from which card circulation in the country began, having its own processing company AzeriCard Ltd (first card center of the country), solves the problem on its own.

"So far, the IBA recorded just a fact of electronic interference (from Israel), when the Bank was investigating with the relevant law enforcement authorities, and fraudsters were detained. Given this statistics, the IBA does not currently see the need and prospects of applying of insurance of plastic cards," an IBA source said.

Besides, the Bank pointed out that introduction of insurance of card operations depends on the conditions offered by insurance companies, and on how it will be expensive for the bank.

"The IBA, in accord with international standards, presents for its clients some levels of guarantees and without the services of an insurance company," the IBA said.

Today the country is numbering several card centers, but only 2 banks (IBA and Kapital Bank) fully and independently control the operation of their centers, which minimizes the risks of their card business. Other banks’ risk level is much higher, but they cannot reduce them at the expense of insurance.

http://abc.az/



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