Press Centre

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Virtual cards stay ahead of the fraudsters

The Times Online
April 15th 2006

Customers concerned that their credit card details might be compromised when they shop online can now take advantage of a new type of card that gives them a “temporary” number for each transaction.

Although the number is linked to the customer’s account, it is valid only for the transaction for which it has been issued, meaning that, if the number were later stolen from the vendor’s database, it would be of little value to the thief.

After the purchase is made, the number is in effect de-activated, although it is retained by the bank for receipt purposes.

The cards, known as “virtual credit cards”, are popular in the United States, France and Sweden, but have been slow to take off in Britain since the technology was introduced six years ago.

So far only Abbey offers the cards to 100,000 customers on its internet-based Cahoot account, although Barclays has plans to introduce a similar service after recent trials.

“If a company’s database is compromised after you’ve made a purchase, the number would be of zero use to the thief,” Diane Shaib, the executive vice-president of Orbiscom, the Irish company that owns the rights to the technology, said. “The number gives you security long after you finish shopping.”

The company said that it was “in talks with all major UK banks” about introducing the technology on a wider scale.

A spokesman for Abbey said: “There is an appetite to use the web to obtain cheap deals, but our research showed that consumers’ online spending would only increase if the safety of their personal information was assured.”

Barclays said that it had recently conducted trials of a calculator-sized device that displays a temporary number on a screen after the customer has inserted the card and typed in their personal identification number (PIN).

The device validates the PIN at the point of sale and displays a number valid only for the next transaction made, thus protecting the customer against fraud.

The service will be rolled out for Barclaycard customers if further tests prove successful. HSBC said that it had no plans to introduce such a service.

Virtual credit cards are offered by Citbank and MBNA in the US, and six banks in France.

http://www.timesonline.co.uk/article/0,,2-2135305.html.

Download entire article (1.7MB): Times_April06.pdf

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