Code generator card fights fraud
A new hi-tech credit card from CryptoCard bundles two-factor authentication onto the plastic in a bid to clamp down on phishing and other forms of banking fraud.
The CD-1 Credit Card Display token, launched on Tuesday, is designed to combat fraud in online and telephone banking. Looking further ahead, CryptoCard hopes to use the technology as a way of provided greater security for ecommerce transactions, tackling the growing problem of Cardholder Not Present (CNP) fraud.
The card, which combines payment card and authentication in a single device, will begin shipping at the start of January. CryptoCard said the technology is already on trial with a number of unnamed banks in Europe and the Middle East.
Neil Hollister, chief exec of CryptoCard, explained that the card integrates long-established key-fob token two-factor authentication technology into a credit card. Users press a button on the card to get a one-time password. This, in conjunction with a PIN code, is used to authenticate access to online banking accounts through a back-end authentication server.
The server technology can be integrated into bank call centres so that the same approach can be used to verify telephone banking customers.
Quite a few banks have already introduced two-factor authentication approaches, which started life in corporate remote access market, to secure online banking transactions. Bundling the one-time password technology into a card itself means that users and banks avoid the problem of dealing with multiple items of kit, a big advantage. CryptoCard's approach is also useful for telephone banking.
While the technology is not as sophisticated as the Visa cards with a built in one-time code generator, developed by Emue, and on limited trial with four European banks, it scores in being much cheaper. CryptoCard said its CD-1 Credit Card will go for around $25-$30 apiece, roughly equivalent to the price of a separate PIN entry device, and certainly a lot less than the as yet-unspecified cost of an Emue card.
Emue cards can be used to digitally sign transactions, something not available with the CD-1 Credit Card, and are specifically designed to replace a password when making online purchases via the much-criticised Verified by Visa scheme. The digital signature approach helps in defending against man-in-the-middle attacks where hacking fraudsters pose as banks.
Emue also has Visa on board, another big advantage. But that's not to say there isn't room for the likes of CryptoCard, especially in tough times for the banking sector.
CryptoCard's Hollister said: "I don't want to criticise to technology of Emue card but it's too expensive for the extra benefit it offers. I don't expect you'll see large volumes. It's further up the technology curve than banks want to go." ®
So, if you lose your card, then you also lose the second authentication factor, guaranteed? At least with the external reader that my bank gave me, the two are rarely in the same place - I only do Internet Banking from home, so that's where the reader stays, while the card is usually in my pocket.
Solutions already in place?
ASB in NZ has been making RSA secureid tokens available for nominal cost for quite a while now, but have enhanced their challenge/response system for large value xfers to all cellphone support.
I would imagine that if successful (and it does work very well from my experience) they'd be able to deploy similar systems elsewhere.
What are the odds of you not noticing that your cellphone had been stolen?
It's a cheap and easy fix and works around the more obvious problems in CNP fraud - but still can't deal with the more expensive aspects (which the banks can't afford to worry about)
"It's further up the technology curve than banks want to go."
What this actually means is that it costs more than the banks currently lose in fraud.
Until legislation is introduced that forces banks to bear the full cost of fraud made possible by the sub-optimal security systems they force their customers to use, thus making things very expensive for them, they will always opt for solutions that cost the least whilst being able to claim that they did their best.
Remember the chip and PIN scam? One of the least publicised aspects of that was the part where they shifted the responsibility for keeping the cardholders security identifier (their PIN) secure onto the cardholder rather than the banks themselves as under the previous system (matching signatures).
I wouldn't mind paying for a card if it provided real security instead of this, as you observe, halfway house that is only secure in certain circumstances.