Payment card issuance errors leave you vulnerable to fraud

Major payment cards

As Consult Hyperion, and as many other analysts, predicted, Covid-19 has driven the adoption and use of contact-free technology at the point of service. A recent survey funded by the National Retail Foundation, found that no-touch payments have increased for 69 percent of US retailers surveyed, since January 2020. In May, Mastercard reported that 78% of all their transactions across Europe were contactless.

Fraudsters are always looking for ways to take advantage of potential weaknesses or even inexperience in new payment devices. A recent news story promoted a man in the middle attack in which two phones are used to transfer and manipulate the transaction message between a stolen contactless card and the point of sale terminal.

In search of the agnostic chip.

Mobile phone operators missed the mobile payments boat, and card schemes and retail banks are now finding themselves in the position where they could soon rule the waves.  It was inevitable that they would eventually arrive; it wasn’t necessarily inevitable for the telcos to give way, but whilst there was a taste for it, and the telcos wanted to have a go, they did give way.  All things considered, however, the voyage has only just begun.

How do you make mobile payments work?  You stick a chip with an antenna inside a mobile phone case (maybe incorporate it into the battery) and off you go.  Wave the phone at a POS and Wooosh!!  Instant payment.  Had the telcos managed to develop a viable (and exciting!!) alternative payment system, this would have been just the job: the payment system would be operated by the telco, and would be delivered as part of the overall mobile proposition – 200 minutes, 500 texts and a payment application – thank you very much.  Now that’s exciting!

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