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A new credit card has been developed in the battle against credit card fraud

Credit card companies use a variety of methods to help battle credit card fraud. Some have implemented the placement of an owner’s photo on their individual card, and others offer hotlines, along with “tips for protection” guidance. Now, Visa is testing another security measure: the Emue Card.   

Aside from the usual security code that credit cards show, the new Emue Card generates an additional four-digit code which is changed each time the card is used. Card owners would need a pin in order to view these four numbers, which would be required to complete a transaction.

The card will be on trial until the end of the year, before which it will be tested by 500 Deloitte employees. If the trial goes well, and the card is certified by Visa, it will be up to both banks and credit card companies whether they will choose to take on the product.

Employees at Deloitte, along with anyone else who has access to the card, can expect to see a rise in safety when it comes to phone, internet, and mail order fraud. According to the BBC, thefts occurring through these mediums, known as card-not-present or CNP fraud, are continuously increasing and make up over 50 percent of all credit card fraud. An Emue Card could help to bring down this percentage because it demands more information than what can be seen on the card - those attempting to use it would have to know the pin needed to generate its additional security code. This security measure would be especially important with transactions occurring without a salesperson present to check signatures or look at photos on the cards that offer them.

The Emue Card has brought about certain obstacles in its development. One example included finding a way to help card owners avoid the accidental pressing of buttons. Developers tackled this by creating buttons which need to be “pinched” to work rather than simply pushed down.  

Sandra Alzetta, head of innovation at Visa, explained another problem-prevention system underway: "One of the things we're testing is how long the battery lasts - the plan is for it to work for more than three years, which means your card should expire before it runs out of power."

Alzetta also discussed the challenge and need of global compatibility features, including “embossed characters for mechanical swipes, a magnetic strip for systems that require a signature, the fixed three digit security code and now the unique four- figure code.”

"You have to remember that our cards work across the world, and not every country or retailer has access to the level of technology we might be used to," she said.
 



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More hoops
By severtki on 5/14/2009 8:49:22 AM , Rating: 2
So once this is adopted, to use cards online, I'm betting we'll have to enter: 1) card #, 2) expiration, 3) security code, AND 4) generated 4-digit code. (As well as name, billing address, etc.)

I hope banks and merchants understand that all that would be needed with this system is just the card # and the 4-digit code. What's the use of all the rest? It's like continuing to lock the screen door after you install a dead-bolt.




RE: More hoops
By afkrotch on 5/14/2009 8:55:06 AM , Rating: 2
Don't forget sometimes you have a password also, if you set it up with Visa or Mastercard. Problem is, the site you're ordering from has to support it. Newegg is one of them.


RE: More hoops
By DigitalFreak on 5/14/2009 11:58:30 AM , Rating: 2
I wish more sites used "Verified by Visa" and asked for your verification password. Newegg is the only one I've ever seen use it. That would be a huge help in cutting down on on-line fraud.


RE: More hoops
By grant2 on 5/14/2009 3:12:02 PM , Rating: 3
There's a lot of very good reasons more sites don't use "Verified by Visa"

1) customers don't get *any* benefit from VbV ... they're always protected from fraud charges anyways
2) retailers also get limited benefit from VbV ... if a crook makes a successful purchase with or without, the retailer still suffers chargeback penalty.
3) most retaillers already try to block fraud by demanding matching personal information of the cardholder, e.g., their address & CVV. If a scammer is able to get this info, how much more difficult is it for them to set up the VbV password?

so retailers have to weigh the costs vs. benefits:

benefits:
- will reduce chargebacks by some unknown amount... probably a very tiny amount.

drawbacks:
- requires a moderate amount of development & testing resources
- some customers will abandon sales when faced with another anti-fraud gateway
- some legitimate customers will be declined because they cannot successfully operate the VbV interface.

Basically VbV is just a PR scheme developed by Visa to play on people's fears. They get retailers to shoulder 95% of the costs (i.e., in development & reduced sales), and then collect 99% of the benefits (i.e., they pay out less in fraud claims).


RE: More hoops
By Narcofis on 5/14/2009 9:52:23 AM , Rating: 2
quote:
I hope banks and merchants understand that all that would be needed with this system is just the card # and the 4-digit code. What's the use of all the rest? It's like continuing to lock the screen door after you install a dead-bolt.


For credit card processing, you actually need the billing address and zip code to be able to process the card for a transaction without the person being present. The terminal specifically asks for it. Obviously you also need the cvv2 but it is not required. Also only when the cvv2 is used will the terminal asks for the address.

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