On 9 September 2019, Swedbank will completely phase out Internet Banking code cards due to stricter EU requirements* for digital authentication of customers. To prevent the risk of some customers missing the phase-out moment or facing queues as a result of leaving the switchover to the last minute, Swedbank will significantly reduce payment limits for code cards from early 2019.
From 10 January, the daily limit on payments with code cards will be 100 euros. The limit from 7 March will be 50 euros and on 6 June the limit will be reduced to 20 euros.
Other code card restrictions during the transition period
Also the option to log in to the Swedbank mobile app with the code card will be closed from 07.03.2019. The mobile app is used on smartphones which have a free digital tool called Smart-ID available already from the beginning of 2017.
The fact that this transition is international is also evident in that another important restriction not related to Swedbank will be put in place from 1 April by international card payment organizations, including VISA and MasterCard - code cards will no longer be accepted for confirmation of online purchases by bank cards.
Reason behind restrictions – customer safety
Code cards is a 20 years old technology that no longer meets today’s security standards and they are being phased out all across Europe. The main reason behind the code card restrictions is caring for the safety of customers. The reason is simple – card codes are not dynamic (they are recurrent, available to 3rd parties as they’re printed on the card itself, the card holders themselves can make all the codes available to a fraudster, etc.).
Swedbank started a gradual phase-out of code cards already in July this year, step by step curtailing the possibilities to use this means of authentication to encourage a timely switchover. A new free digital authentication solution – Smart-ID – is offered since last year and is in used by already 300,000 Swedbank customers. To support customers who don’t have any smart device yet, Swedbank has halved the standard price of the security token since June, while providing even more favourable terms for certain customer groups, for example, pensioners can get the security token for 2 euros and underprivileged persons – for free.
Limits introduced to prevent the risk of missing the deadline
There is progress but its insufficient. The statistics show that customers are actively switching to new tools – during the time period from June to September, the number of code card logins to the bank’s digital channels has dropped by 11%, whereas logins with Smart-ID increased by 34% and with the security token – by 15%. However, this rate is insufficient for risk prevention as nearly 500,000 customers still use the code card out of habit on a daily basis. Unfortunately, the current feedback from customers suggests that a major part currently plan to leave it to the last minute to decide about switching to other means of authentication.
Such an amount of customers leaving the switchover to the last minute would mean that all the branches collectively would be handling code card replacement for two months without providing any other service during this time.