Online card authentication systems to change

Posted by Michael Bolt in Banking on 27 November 2014 - Michael worked as a Credit Analyst at checkmyfile until 2015

MasterCard and Visa have announced plans to replace their often criticised online security systems – MasterCard SecureCode and Verified by Visa – with easier to use systems.

The existing online security feature offered by both MasterCard and Visa is based on the 3D Secure protocol. The system has been in place for several years and asks online shoppers to enter extracts of an extra password during the check-out process. The system, which was developed by Visa to reduce the number of fraudulent credit and debit card transactions, has come in for criticism for being unwieldy and open to misuse.

Typically, shoppers making an online payment see a pop-out window appear requesting letters from an extra password - to verify that the genuine cardholder is completing the purchase. The system has proven unpopular with online shoppers, as it requires them to use passwords which can easily be forgotten. It can also be difficult to ascertain whether the pop-up window that appears is genuine or fraudulent.

Passwords themselves are vulnerable as they are used repeatedly for authentication and soft passwords can often be ascertained from social media sources or other methods, exposing the consumer to potential fraudulent transactions.

The new 3D Secure 2.0 system is designed to tackle some of these issues by reducing the reliance on a static password as a method of verifying identity.

The new system launched by the card providers will initially likely rely on a unique code which is sent to a registered mobile phone. This code will change with each online transaction made. This does away with the need for consumers to remember complicated passwords simply to complete online transactions.

Eventually it is expected that the system will also use biometric data such as a fingerprint in order to verify an individual’s identity. MasterCard is also piloting tests for apps which use facial and voice recognition software to authenticate cardholders. The new 3D Secure 2.0 protocol could be adopted as soon as 2015 and it is hoped that it will gradually replace the current model and prove to be both more convenient and secure for users.

Ajay Bhalla of MasterCard, says, “All of us want a payment experience that is safe as well as simple, not one or the other.

“We want to identify people for who they are, not what they remember. We have too many passwords to remember and this creates extra problems for consumers and businesses”.

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