Innovation and new technology that will reduce fraud risk is on the horizon for consumer credit cards. Credit and debit cards have long been an easy target for those wishing to commit fraud, both online and in physical settings. These acts of fraud have caused large financial losses for banks and credit card companies; in fact, “credit card fraud costs banks millions of pounds each year,” (Wakefield, 2016). So, these institutions are always looking for ways to reduce risk with credit cards. A new technology that changes the card security code on an hourly basis is nearing production, and could possibly reach consumers by the end of 2016. Following is a summary of the technology, the possible advantages and disadvantages to credit card users
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In the small space where the three-digit security code is usually found, credit cards will instead have a small digital display (Daily Mail Reporter, 2016). This digital display will randomly generate a similar three-digit code—the important difference being that this code changes every 60 minutes. Due to the constantly changing code, it becomes very difficult to steal card information, (at least without having the physical card in person), as the information will only be relevant for a maximum of 60 minutes. This digital screen is made possible by the thin lithium battery that will be integrated into the card, which is designed to last for three years (Wakefield, …show more content…
Since fraud continues to be a large risk to credit card users and issuing companies, it is important that the best ways to counteract risks are always being implemented—it does not take very long for security systems to be hacked and exploited. The best way for consumers and companies to protect themselves is to stay up to date on new technology, and to implement more effective security systems as soon as they become available. Thus, this new code changing technology should be taken very seriously.
To summarize, this new credit card technology has significant potential to protect consumers and companies from becoming victims of credit card fraud. With these new cards, risks spurring from online purchases or from having card details exploited will certainly be lower. As a result, this will initially lower costs caused by fraudulent credit card transactions. However, it is important to note that technology is not perfect, and consumers must continue to keep their card details secure and protected to ensure they do not become a fraud
In the small space where the three-digit security code is usually found, credit cards will instead have a small digital display (Daily Mail Reporter, 2016). This digital display will randomly generate a similar three-digit code—the important difference being that this code changes every 60 minutes. Due to the constantly changing code, it becomes very difficult to steal card information, (at least without having the physical card in person), as the information will only be relevant for a maximum of 60 minutes. This digital screen is made possible by the thin lithium battery that will be integrated into the card, which is designed to last for three years (Wakefield, …show more content…
Since fraud continues to be a large risk to credit card users and issuing companies, it is important that the best ways to counteract risks are always being implemented—it does not take very long for security systems to be hacked and exploited. The best way for consumers and companies to protect themselves is to stay up to date on new technology, and to implement more effective security systems as soon as they become available. Thus, this new code changing technology should be taken very seriously.
To summarize, this new credit card technology has significant potential to protect consumers and companies from becoming victims of credit card fraud. With these new cards, risks spurring from online purchases or from having card details exploited will certainly be lower. As a result, this will initially lower costs caused by fraudulent credit card transactions. However, it is important to note that technology is not perfect, and consumers must continue to keep their card details secure and protected to ensure they do not become a fraud