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MasterCard and Visa have recently announced the coming implementation of new security protocols. The new security systems include some of the toughest and most innovative protections that aim to put an end to credit card fraud and the multitude of security breaches that have happened in recent years across the U.S. These defenses will block hackers and credit card thieves, who use devices such as skimmers or malware, from stealing credit card data.
Both Visa and MasterCard have initiated the new security systems in addition to the security measures that are already in use by the banks and credit card issuers. MasterCard plans to use biometrics as a new form of identity verification. Visa, on the other hand, is introducing a “token” technology that uses mathematical coding to replace and scramble the credit card numbers after each transaction.
Biometric security technology has been around for a while, and some credit card issuers have toyed with the idea, but the technology has never actually been used before. Now, however, MasterCard appears ready to launch the use of biometrics on a scale that has never been seen before. Since the company handles more than 23 billion transactions a year, a shift towards biometric use could have game-changing results.
MasterCard is investing more than $20 million into the new cybersecurity technology, which includes a pilot project to start testing various biometric technologies sometime this year. The company plans to utilize a combination of different biometric systems, such as matching a cardholder’s fingerprints to authenticate credit card transactions, and use voice and facial recognition software to verify the identity of the cardholder.
Visa Token Service
At Visa, a new technology replaces traditional, permanent credit card customer data— like account numbers and expiration dates— with unique numbers that validate the cardholder’s identity. This technology, Visa Token Service, is manufactured specifically for Apple devices and uses near field communications (NFC), and fingerprint verification.
Visa started using this type of “tokenization” technology last fall in partnership with Apple. When the feature was first introduced, it was limited to only cardholders with iPhones. Now the company says that it wants to broaden the application and use Visa Token Service to process retail transactions at businesses that subscribe to its Visa Checkout service.
A spokesperson from Visa explained that the ability to remove credit card account numbers from the transaction process represents one of the most innovative and promising technologies to be seen in decades. Once the credit card data is eliminated, there is nothing left behind for criminals to steal even if they do hack into the merchant’s credit card database— which is what happened at both Target and Home Depot.
Retailers have been complaining for a long time that it should not be their responsibility to ensure the protection of credit card information, and that it’s the responsibility of the banks and credit card issuers to guarantee that security. By taking the steps outlined by Visa, this process will benefit both the merchants as well as the credit card holders.
The Pressure is On
Both Visa and MasterCard have been working together to expedite the rollout of chip-enabled credit cards. The deadline for the chip-technology isn’t until October 2015; however, many banks have already started issuing the newly updated cards out to customers. It is believed that chip-enabled cards will be fully launched to all consumers by the end of this year.
The rush to secure consumer credit card information is due to the imminent threat of another massive cyberattack and the loss of billions of dollars. A team of cyber security experts revealed last month that another security breach, committed by international hackers, stole from nearly 100 banks, and reported lost about $1 billion combined.