Question: How do you see the potential for payment card growth in Indonesia?

Answer: Indonesia is the fourth-most populous country in the world. Right now the share of payment card use is very low, so it’s a huge opportunity. I think in Indonesia the acceptance of credit cards is not as widespread as what you see in the United States. So the challenge to grow the market would be to grow the acceptance and have more people use the cards. We really think it’s very exciting in Indonesia just because of the size.

From a security point of view?

Indonesia has gone quite far toward adopting strong security on the credit card side. And, of course, the problem with credit cards is only certain people can qualify for them. Debit cards can go to more people and especially prepaid cards, where you don’t even need a bank account to use them. So I’m hoping that we will see more development of debit and prepaid in Indonesia. But on the credit card side, all cards in Indonesia have the chip, which is the more secure form of payment. So that’s a very strong security measure in Indonesia.

The fraud rates in Indonesia have come down quite a bit since the adoption of the chip technology. And I’m quite optimistic that the fraud in Indonesia will continue to be low. It’s actually lower than the global average today, which runs around 5 percent per US$100 — 5 basis points. It’s a very low rate globally. And I believe Indonesia is lower than that.

Here in Southeast Asia, we have seen in the past quite a lot of criminals who tried to attack the system. In fact, neighboring country Malaysia was quite well-known for that a few years back, three to four years ago. But the Malaysian government had adopted some very strong security measures. So I think that if people are thinking that security in this area is a big haven for fraud, I think they’re wrong. I think they’re actually doing quite well when we look across the world. Most Asian countries have lower rates — Japan, Korea, East Asian countries, most of Southeast Asia as well ranking below. Indonesia is below the average fraud rates.

The countries with higher fraud rates are some of the African countries. Latin American countries typically have a little bit higher fraud rates. And even the US has a higher fraud rate than most of the Asian countries.

What kinds of credit card fraud are most prevalent, especially in Indonesia?

I don’t think Indonesia has a specific claim to fame as far as credit card fraud in general. The same type of fraud that we see everywhere, you would find it here. There are several types of fraud. One is you can make a false card, a counterfeit card out of card information, but you don’t see a lot of that here in Indonesia because of the chips. You cannot make a fake chip. That’s a good thing for Indonesia, you don’t see counterfeit fraud.

What you do see is what we call “card not present” fraud, so when you go shopping online, people can commit a fraud by getting just your credit card number to enter online, and your name, and that sort of thing. They don’t need the physical card. You will see that here in Indonesia as you see elsewhere in the world.

Another thing that we consider fraud is if the merchant that you shop online are selling something and they never deliver it, or they deliver something that’s different from what you are promised. It doesn’t have to do with the card itself but we don’t like that kind of activity in our system and so we work with the banks to get that merchant out of the payment system.

What has Visa done or will it do to prevent such fraud?

There are two ways. One is the dynamic data. If you have a card with dynamic data you’ll be protected. And the second big way is that we have a computer system that uses advanced technology to look at the type of transaction that you’re doing and identify if it’s a suspicious transaction. We call that the Visa Advanced Authorization System.

If someone’s using your card to do a transaction that’s very unusual for you, say, you always shop in Indonesia and you never shop outside the country. All of a sudden we see that transaction outside that country. We will watch, and then notify the bank. The bank can either let the transaction through because they know better than we do or they will block the transaction and sometimes they’ll actually call you. That’s for the cardholders’ protection so that the fraud will be prevented, and you can talk to the bank and make sure that the card still works.

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