I know bankers are, tired of paying tens of thousands of dollars a month on debit card fraud. Well this multi-factor authentication tool from MasterCard claims purchases over the internet will be as secure as POS purchases….well let’s just say less risky.
It works like this: The cardholder dips the card into a handheld reader and enters a PIN. If the PIN and card match-up the handheld reader gives the cardholder a one-time pass code. This pass code is sent to the card issuer over the merchant’s website for authentication.
Of course, this will all take some time to implement, but “Card not Present� transactions are roughly half the disputes from debit cards according to this post from Financial Times. How does saving half of all your disputed transaction losses from fraud sound?
I have a feeling there will be a lot more of these types of card authentications coming out soon. They may already be out there and I just don’t know about them. Start researching an authentication mechanism that works for your institution and user base. It may even be a regulatory requirement in the future (multi-factor for purchases on the internet).
Finally, the bottom of MasterCard’s page also claims that it can be connected to any device. Maybe this would be a great way to introduce mobile banking on cell phones, multi-factor for phone banking or a true multi-factor authentication with your online banking. No more verifying a picture you chose about 9 months ago, but actually using something you have (the bankcard) and something you know (a password). But, that is a whole other rant.
That is my little glimpse into the future of payment cards, but I’m not a banker so I can’t implement anything like this. I do wish my bank had a smart card. I would be all over it.