Smart credit cards can eliminate online fraud

Smart credit cards can eliminate online fraud

642
3
SHARE

I have heard about this technology for the first time in Sitges, on The European Summit and back then it was explained vaguely. But now it becomes reality, and this new generation of smart credit cards can end online fraud for good. Let’s see how.

Probably all of us used online payment in our lifetime. When making such a transaction, you need some information from the card you are purchasing with. The credit card number, your name, expiration date and the CVV (Card Verification Value) code. The latter is the 3-digit numeric code on the back of the card which is needed to verify the transaction.

If someone steals your credit card, or the data of it online, he will have access to all these, as they are currently fix information. But what if it wouldn’t be like this?

Motion Code, from Oberthur Technologies made this happen. On their cards, instead of the classic printed CVV code, there is a small display on the back made with “smart ink”. Using this technology, the card changes its CVV every hour for three years, therefore even if someone has stolen the card information, after an hour it will become useless, as on the physical card, the security code has already changed to a different one. This can be a real solution against online fraud, as in most cases, the criminals use the stolen data hours or even days after it was taken.

Of course the card has some disadvantages as well, since sites which require CVV verification for transactions, will not be able to memorize the data anymore, it has to be re-entered every time someone tries to purchase. Also, it still does not protect against stealing the card itself, but of course that should be reported to the bank immediately.

As for now, two French banks already started to use the new smart cards, but probably more will follow as more and more transactions happen online, and the criminal circle built around stealing the information of them is evolving as well.

Why is this good news for you? In case someone pays on a cam site with a stolen card and it gets reported, the amount can be charged back via the issuing bank, and not every cam site protects you against this. If this tech will spread, it will mean you will do not need to worry anymore about members paying with stolen credit card data, as the information in their hands will be useless within an hour.

3 COMMENTS

  1. This is a great improvement! If card fraud could be eliminated, or at least reduced, this would be really helpful. And maybe sites will give a better commission to models, as they dont have to cover chargebacks 🙂

  2. For “prepaid” shows or token/credit buy a very good solution. I just wouldnt like it if someone likes to extend the show and cant as the card information needs to be re-entered.

    It will not help if the card is physical stolen. Here my solution would be a RFID master that make a credit card and other devices useful/valid if you are near. Its like keyless entry in a car. So even a stolen card cant be used, if away from the master: You!

    Anyway a next step to more safer online shopping. Good idea.

  3. Luckily I haven’t had to face this kind of issues so far…. but any step towards more safety and reliability is a good step for everyone in this industry!

LEAVE A REPLY