Credit card signatures need to be replaced by a PIN system in Australia to protect against fraud, a parliamentary committee has found.
The House of Representatives economics' committee also wants EFTPOS cards that can be used for internet purchases - just like their credit card counterparts - and the introduction of chip technology.
It follows an inquiry by the committee into credit card changes in recent years, including the overhaul that has enabled merchants to charge customers a surcharge if they use a credit card.
The committee found Australia has fallen well behind other countries in terms of the safety mechanisms available to protect against credit card fraud.
It found in the not too distant future, Australian shoppers overseas may find they cannot use their credit cards because some countries are going towards PIN-identification, ditching the back-of-the-card signature altogether.
"While credit card fraud is comparatively low in Australia, this does not mean steps should not be taken to prevent it," it found.
"The committee considers that a move to PIN-based authorisation would be highly desirable in terms of fraud prevention."
There are also concerns that credit cards are more flexible for shoppers than low-cost EFTPOS cards.
Other countries have gone to systems that enable EFTPOS cards to be used online. In Australia, credit cards are effectively the only internet payment system.
The committee found there was no good reason why EFTPOS cards should not be enabled to let them be used for online shopping.
The advance of chip technology, which can protect cards even better than PIN numbers, was also backed by the committee.
The inquiry rejected claims by banks the reason they had not improved the safety features of credit cards was that they were getting less in so-called interchange fees from merchants.
"The committee does not accept this proposition," it found.
"In the US, technology is even further behind but interchange revenues are three times as high.
"Conversely, technology is more advanced in some debit systems where interchange fees are zero."
Source: AAP, Canberra Australia
