Comment on Kind attention

CREDIT CARD FRAUD DETECTION

Dear Readers,

As per our promise we are again posting a valuable comment of Mr. Sitangshu

"I wanted to let your valuable readers get privy to some information that may help them to reduce "Credit card fraud where their credit cards are used for retail shopping".

In early Year 2000 American Express came out with a program called "Private Programs for Shopping", and later Citi Bank introduced the concept of "Disposable Credits Cards". In both these instances the "Credit Card Holder" is presented with a small "Software" that uses a "Random Number Generation Algorithm". This Software is available to the user (credit card holder) on a USB device that uses RSA encryption. Just before shopping the card holder inserts the device into her/his Computer or Mobile Device, and is asked to type in a password which is unique each time the device is used. The Device accepts the "Password", and then requests the card holder to input their "Credit Card Number, expiration date, and CVV number". When the card holder does that she/he is presented a randomly generated NEW CREDIT CARD NUMBER with the same expiration date and different CVV number. This new Credit Card Number is a "Virtual Number" that is valid only for this "Purchase or Transaction". It will be useless after this transaction.

The Card holder then proceeds to the Merchant Site and makes her/his purchases online using this "New Virtual Credit Card Number". The Bank (American Express or Citi) allows this card to go through. They can link this new "Virtual Card Number" to the original card. After this purchase is done, this "New Virtual Card Number" is made "Invalid - i.e, it cannot be used again".

This is a unique way to solve "Credit Card Fraud for Online Shoppers". Even if the "New Virtual Card Number is Stolen" it cannot be used.

I have in fact used this mechanism for "online Purchases in the USA". Works very effectively.

In fact I wrote a "Whitepaper" where I suggested combining this technique with RFID as a "Secure Retail Solution" for Indian Shoppers. The RFID chip will contain Card Holder Biometrics together wih the "Credit Card Virtualization Software". Users (Card Holders) will never lose any sleep doing "Online Shopping".

Warm Regards

PS: Love your Blog and will keep posting more ideas in the future..

June 27, 2009 6:59 AM

Thanks to you Mr. Sitangshu