Press Centre

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Internet card use gets boost from disposable numbers

Cards International
6th September 2006

Disposable card numbers, already a hit in some European markets, could become common-place in the US as well, as software solutions provider Orbiscom is finalising negotiations with several banks about using the numbers to replace debit card data online.

“We provide disposable card numbers in the United Kingdom already and banks in the United States are clearly aware that a great deal of online activity is debit card-driven,” said Diane Shaib, executive vice-president at Orbiscom. “One bank called us recently and said that its customers were asking them for the technology, which is when you know you are onto something big.”

Shaib said that Orbiscom’s single-use, disposable credit card numbers are ideally positioned for protecting cardholders from fraud and identity theft in online purchases, and added that recent headlines have focused attention on the issue even as debit use has increased. Shaib said that Orbiscom has generated “millions” of the numbers and has not had one incident of fraud. In the US, credit card issuers Discover, Citi Cards and Bank of America use the software, which is marketed under different names by each of the issuers.

The programme’s marketing is just taking off in the US, Shaib said, adding that between 5 percent and 8 percent of customers offered the numbers use them.

“US banks were worried about the cannibalisation of credit by debit, but now they are looking beyond the cannibalisation issue, as consumers vote with their feet,” Shaib said. “The fact is, customers are only going to grow more reticent about using any form of plastic without some form of security online beyond zero liability.”

Shaib said Orbiscom’s Controlled Payment Numbers offers the same protection to debit cardholders as it provides for credit cardholders. The software creates a single-use, disposable number linked to the cardholder’s actual card number. When the cardholder is about to complete an online transaction, the software intervenes, providing a disposable number, Shaib said.

“It looks just like a credit or debit card number, but it’s not your number,” she said. “It’s a proxy and it can be linked back to the cardholder’s account, but only by the cardholder’s bank, so their data is not sitting out there. Uptake has been building steadily. I think it might have been a bit ahead of its time, but now the incidence of fraud is so high and the uptake has doubled this year.” Shaib added that the use of disposable card numbers would increase with each report of identity theft.

“Last year was the tipping point,” she said, noting the high number of online fraud incidents, many involving reputable national retailers and issuers, that focused attention on online security. “We went from calling banks to banks calling us, and so really feel like the extension to the debit side of the business comes as interest in the product has grown.”

Orbiscom has also introduced a MasterCard-branded virtual debit card for PayPal. The product, issued by JPMorgan Chase, enables PayPal stored-value account holders to use their PayPal funds to pay for purchases at online merchants which do not accept PayPal but do take MasterCard.

JPMorgan Chase will ‘issue’ the card, which exists only in electronic form, while First Data will be the transaction processor, according to PayPal, a unit of online auctioneer eBay. Technology from Orbiscom provides a one-time-only MasterCard account number valid for a specific transaction.

http://www.cardsinternational.com

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