Earlier this month we reported on a data breach that affected an estimated 1.5 accounts when credit-card-transaction-processing company Global Payments was attacked by hackers. Global Payments was removed from Visa`s list of preferred processors, while the CEO of Global Payments assured customers that they were taking all possible measures to protect their information and secure their system.
The breach was just the latest to raise concern about security; The Heartland Payment systems breach in 2008 compromised approximately 130 million accounts and cost Heartland a $110 million settlement to credit card companies, and Consumer Reports estimates that the total loss from credit and debit card fraud is about $2.4 billion each year. Federal Reserve statistics from March 2011 show that credit card fraud costs the U.S. approximately $52.6 billion per year.
As more and more people make purchases online in what are known as “card not present” transactions, there is greater concern about criminals targeting internet shoppers and making fraudulent charges via online transactions. Credit cards themselves have become more secure in recent years as a result of PINs and chip technology, like the increasingly common EMV chip cards, known as “smart cards.” These cards are already standard in Europe and Canada and will likely be in wide circulation globally within the near future. However, such security measures are meaningless against fraudulent online transactions.
New Security Solution
Enter South African company Entersekt, which provides banks with secure technology software solutions for online and mobile transactions. They have come up with transaction authentication software that sends a “push” notification to a user`s mobile phone whenever their credit card is used for an online transaction. The card holder can then authenticate all online purchases and transactions and alert their credit card company immediately in the event that they are notified of an unfamiliar charge.
Push notifications are already widely used by many different mobile apps, for everything from weather alerts and news headlines to telling you when it`s your turn to make a move in a digital game. When a user`s credit card is registered with this new software and they make a transaction online, they will simply receive a notification on their phone, giving them peace of mind that they`ll be alerted to any unusual account activity.
How it Works:
Step 1. Sign-up Your card with Entersekt -> Make a purchase -> Receive an alert
Step 2. Got an alert about transaction you did not place? – call your bank immediately.
Entersekt`s CEO, Schalk Nolte, says that this is the same software that has long been used by banks to authenticate online banking transactions, and will now be available to everyday online consumers. He notes that “78% of internet users have made online shopping purchases in the past year, with mobile purchases increasing from 18% to an anticipated 30% by 2015.”
MasterCard Worldwide has just approved Entersekt`s software, saying that it is compliant with their SecureCode standards for online commerce. Visa has already certified the technology for use in its Verified-by-Visa service, but Entersekt CEO Nolte says the MasterCard approval is “a significant and necessary stamp of approval for our software”.
Two Layers of Protection for MasterCard
MasterCard`s SecureCode privacy program is a service they offer cardholders which adds a layer of privacy to all online transactions, providing a private code for each account to use for online purchases. Retailers do not see this code, as it is known only to cardholders and their banks. MasterCard credit card holders need only go to their card issuer`s website, click “sign up” on the SecureCode page. After confirming their identity by answering a series of questions, they can create their code, which they will then use every time they make a purchase through an online merchant.
With the addition of the Entersekt technology, after making the purchase, users will then have the added security of receiving a push notification on their phone.
These technological advances make using credit cards more secure and provide peace of mind for card holders, but they are no substitute for careful and cautious card use. Anyone wanting a refresher on protecting themselves against fraud should visit the Security and Protection section of our site for further reading.