Credit card security is about to get much better, which will be a welcome development given the slew of recent cyber attacks on online retailers Target and Home Depot. Measures are finally being put in place to ensure that credit card transactions and ecommerce remain safe and viable ways to conduct business.
Several new technologies are being rolled out at the moment that address the issue of credit card security and fraud prevention. Apple in their recent product launch touched upon this subject with their new app, Apple Pay. Additionally, there has been increased mention in the news regarding online payment currency Bitcoin and the encryption method known as Tokenization, both of which are used to help secure making payments online. Banks and financial institutions are likewise making upgrades of their own.
Chip-based credit cards
American banks are beginning to shift towards credit card technology that is expected to significantly reduce fraudulent transactions. According to The New York Times, American credit card companies plan to introduce more than 575 million cards by the end of 2015 that contain computer chips. Chip-based cards are already in use in Europe and Canada. Banks also commented that they will add another level of security, via a code to enter, once consumers become accustomed to the new cards.
Up until now, banks were waiting for retailers to upgrade their systems, to accommodate the improved cards. With the recent data breaches, it was decided that increased security is necessary now, as is the need for tighter regulations governing liabilities related to fraud. In accordance with the new rules, the party with the less-secure system is the one that will be held accountable for the losses, reported the news source.
Visa’s new tech
Another technology, developed by Visa, recently introduced to the market, is Visa Transaction Advisor or VTA. This new technology is capable of analyzing 500 pieces of data, such as past transactions, location and whether the account has been part of a data breach, and assigns credit scores to credit cards being used at retailers. The process takes less than a millisecond, reported Today.com.
Before introducing VTA to the market, Visa conducted a two-month test of VTA at 300 Chevron gas stations in Los Angeles. As a result, Chevron witnessed a 23 percent reduction in refunds related to fraud. Today, approximately 25,000 gas stations across the country currently use VTA.
Adam Levin, chairman of IDentity Theft 911, believes the new technology is a welcome addition to fraud prevention.
“Anything that helps spot and stop fraud before it happens is a lot better than having to deal with the consequences after it happens,” Levin said.
Visa is currently considering other places where VTA would best be used. ATM’s and online merchants seem to be the next destination points, reported the news source.Back To Blog