Cyber-attacks spark card payment discussion

14.09.2021 - 10:16
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 Mynd: Landsbankinn
Iceland is all-but defenceless if a foreign state decided to cripple society by stopping the processing of credit and debit card payments, according to one economics professor.

There may be no immediate prospect of cyber warfare on the country level at this time, but hackers did attack Valitor, Arion banki, and Íslandsbanki this weekend, and they did manage to stop all card transactions in Iceland for a while. There was a similar attack on SaltPay a week before. 

No demands were made by the hackers in any of the distributed denial of service attacks, and there were no lasting consequences after services came back online. 

The director of the online security team at Fjarskiptastofa (the Electronic Communications Office of Iceland) told RÚV the attacks were possibly practice runs for other, bigger attacks to come. An online security expert from the company Syndis also told RÚV on Sunday that the country’s defences against such attacks are probably not as good as they could be.  

Gylfi Zoega, professor of economics, says it is cause for concern that Icelanders are almost-totally reliant on card payments, even if cyber security flaws can be quickly ironed out: “The country is completely vulnerable to foreign countries, such as powerful countries like the USA, that can simply switch our society off by banning Visa and Mastercard from servicing Iceland, just like they did to Wikileaks a few years ago,” Gylfi says. “If we were to land in a 2008 situation with our payments system today, we might not be able to go out to a shop and buy a sandwich; so this is a national security issue.” 

Gylfi adds that it is also an important issue for household finances, because the cost of each card transaction soon adds up to significant sums each year. “You just don’t notice it. You’re paying so little each time. You get a bill in your online bank and are paying 200-300 krónur each time, so people don’t notice it,” he says. 

Gylfi says card transactions seem to cost more in Iceland than overseas. “When we use the card and the phone to pay, it is extremely expensive compared to overseas. When you have Apple Pay on your phone and then you buy something small, then you’re paying all these agencies: your bank, Apple, and then the foreign credit card company. It is very expensive. It costs some tens of billions of krónur more than it needs to, and it makes a difference,” Gylfi explains. 

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