News & Views - Savantor

Time to move to DDA?

Monday, 01 January 2007

When the UK initially migrated to Chip and PIN a decision was taken to use SDA to check whether the card was genuine.  At the time the cost differential between SDA and DDA was significant and there was no business case to support DDA.  The assumption, however, was that when the first generation of chip and PIN cards were replaced in 2007/8 that DDA was likely to be the preferred choice.  Well we are at that point and signs are that banks are seriously considering this move.  Given the proposed move to contactless taking place from September in the UK this is an additional factor to support the change as there are rumours that DDA will be mandated for contactless.  Security is the main issue here and although SDA has not been seriously attacked (and given the cost of doing this and the continuing availability of mag stripe cards, why would fraudsters bother?) any cards issued now will be around until 2010 so it's probably better to be safe than sorry.  The second main concern was cost which has now largely disappeared as the price differential now seems to be around 0.25 - 0.30 per chip.  The third concern was speed as DDA would have slowed POS transactions down but given the developments in the last 3 years this is no longer the case.  So it seems that 2007 really will be a year of change with the likelihood that in addition to introducing contactless the UK will join the likes of Austria, France, Germany and Switzerland in rolling out DDA cards.

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