Feeds

Visa's digital credit card could raise legal stakes

Competitors may hop on bandwagon

Beginner's guide to SSL certificates

Visa has introduced a computerised credit card which it hopes will help banks battle fraud. The innovation could force other card issuers and banks to implement similar technology, one data protection expert has said.

Four banks have agreed to trial Visa's card, which generates a unique, one-use code to verify each transaction.

The idea of a one-use number to make sure that the person behind a transaction is the genuine card owner is not new. Some banks currently issue users of online banking with calculator-sized devices to generate unique codes.

But EMUE Technologies has developed the Visa card which actually contains a computer within the card itself that generates the number. Visa said that the card is no bigger than a normal credit card and that the system will help fight fraud when a card is used remotely.

"The card will help in the fight against card-not-present fraud in two ways," said a Visa statement. "Firstly, as the one-time code generated is for a specific transaction, once used it cannot be used again by anyone. Secondly a fraudster would need to be able to get hold of a card and know the person's PIN in order to commit fraud ... Visa Europe believes this will provide more consumers with greater confidence to shop online and provide its member banks with a unique solution for online and telephone transactions."

To use the card a person has to be shopping at an online outlet that also uses the system. The card user puts their personal identification number (PIN) into the card using the ten numbered keys on the back of the card. It then generates the one-use number that validates the transaction at the vendor's site.

Verified by Visa, the system that will use the technology if it is implemented more widely, currently demands that users remember a password to verify transactions. The PIN-generated number will replace that password in the system.

The Data Protection Act could force other banks and card issuers to use similar technology if the Visa trial is successful, according to one expert.

One of the Data Protection Act's principles governs the security that organisations should use to protect people's information. It says that "appropriate technical and organisational measures shall be taken against unauthorised or unlawful processing of personal data and against accidental loss or destruction of, or damage to, personal data".

The Act says that banks, for example, should protect information against theft "having regard to the state of technological development and the cost of implementing any measures".

William Malcolm, a data protection expert at Pinsent Masons, the law firm behind OUT-LAW.COM, said that Visa's development could change the law's view of what is technically possible.

"Card issuers are under an obligation to ensure that the security they put in place to protect a cardholder's information is appropriate," he said. "This is a moving feast – card holders need to keep security constantly under review, looking at emerging technologies, the cost of implementing these technologies and take into account the increased risk to customers of identity theft.

"As technologies become lower cost and more standard, there becomes more of an argument that card issuers ought to be raising their game," said Malcolm. "The market norm for security is constantly evolving, what is appropriate today is unlikely to be appropriate tomorrow."

The four banks trialling the system are MBNA in the UK, Cornèr Bank in Switzerland, Cal in Israel and IW Bank in Italy.

Copyright © 2008, OUT-LAW.com

OUT-LAW.COM is part of international law firm Pinsent Masons.

Related links

Demo video of Emue card on Youtube

Internet Security Threat Report 2014

More from The Register

next story
'Regin': The 'New Stuxnet' spook-grade SOFTWARE WEAPON described
'A degree of technical competence rarely seen'
You really need to do some tech support for Aunty Agnes
Free anti-virus software, expires, stops updating and p0wns the world
You stupid BRICK! PCs running Avast AV can't handle Windows fixes
Fix issued, fingers pointed, forums in flames
Privacy bods offer GOV SPY VICTIMS a FREE SPYWARE SNIFFER
Looks for gov malware that evades most antivirus
Patch NOW! Microsoft slings emergency bug fix at Windows admins
Vulnerability promotes lusers to domain overlords ... oops
HACKERS can DELETE SURVEILLANCE DVRS remotely – report
Hikvision devices wide open to hacking, claim securobods
prev story

Whitepapers

Why cloud backup?
Combining the latest advancements in disk-based backup with secure, integrated, cloud technologies offer organizations fast and assured recovery of their critical enterprise data.
A strategic approach to identity relationship management
ForgeRock commissioned Forrester to evaluate companies’ IAM practices and requirements when it comes to customer-facing scenarios versus employee-facing ones.
How to determine if cloud backup is right for your servers
Two key factors, technical feasibility and TCO economics, that backup and IT operations managers should consider when assessing cloud backup.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Choosing a cloud hosting partner with confidence
Download Choosing a Cloud Hosting Provider with Confidence to learn more about cloud computing - the new opportunities and new security challenges.