In the fight against mounting credit card fraud, credit card companies are seeking increasingly creative ways to foil fraudsters. Latest arrival on the block? A credit card that generates its own security code to help prevent online shopping fraud.
The new credit card features a small battery-powered LCD display on the back, along with a small 12-button keypad. When the cardholder makes an online purchase, he or she types in the card’s PIN number. The card then displays a security code on the LCD screen, which the cardholder types in for verification on the online shopping site.
Still in the developing stages, the credit card will be tested in Britain during 2009 by card issuer MBNA according to The Daily Mail. In addition, banks in Israel, Switzerland, and Italy will be issuing the card to consumers as part of a worldwide test.
The keypad credit cards provide a new line of defense against the fastest growing segment of cybercrime: the theft of credit card information through spyware or other malware uploaded on unsuspecting consumers’ computers. The randomly generated security code ensures that even in the event that the cardholder’s credit card information is stolen, fraudsters will be unable to use the information for online purchases.
While card issuers hope that the new security feature will give consumers more confidence when shopping online, early consumer reactions have been mixed. Most welcome the added layer of security, but some are concerned that it will make the process of entering one’s credit card information more time-consuming and cumbersome, particularly when making multiple purchases.
Many European consumers are already familiar with a variation of this technology. Some European banks are requiring users to carry along a calculator-sized card reader, which generates a random verification number to enter when checking an online bank account. Compared to carrying a separate reader around, the LCD credit card with its built-in keypad and random number generator offers a step up in convenience.
One of the card’s strengths is that it uses two-factor authentication, which has proven to be one of the most successful verification methods in the security industry. The LCD card promises to offer a viable alternative to the present system of security built on constant, reusable passwords, which have proven vulnerable to attack.
Unfortunately, in the world of online security, nothing is ever perfect. Still, the new LCD credit card promises to be a step in the right direction.
