Credit card fraud in Malaysia fell to its lowest level in five years in the first quarter of 2005, credit card company Visa said today.

Fraud reported at merchant outlets in the country dropped to 0.12 percent of sales in the first three months to March, compared to 0.74 percent over the same period five years ago, it said.

The drop in fraud was the result of concerted efforts by merchants and the Malaysian authorities to tackle the problem, its senior vice president for risk management, Peter Maher, was quoted as saying by the Bernama news agency.

He said the 84 percent reduction in total fraud followed moves by banks and government agencies to adopt the EMV chip technology, which ensures safe electronic payments.

"In May alone, there were 5.2 million chip transactions made on Visa debit and credit cards - almost 85 percent of all transactions - making Malaysia the most advanced chip market in the Asia-Pacific region," he said.

"Cardholders should be assured that this new platform provides the best long-term defence against counterfeit fraud," he added.

Maher said Malaysia was also the first market in Asia to deploy high-security encryption technology to defend against fraudsters' attempts to break into telecommunication networks that carry sensitive account data between merchants and banks.

"By encrypting account data at the point of use and before it is transmitted to the bank, only the intended receiver would be able to decode the data, thus preventing any attempt by fraudsters to capture credit card details and account numbers," he said.