MasterCard Inc. is expanding its efforts to eliminate the use of PIN numbers credit cards when customers make online purchases in an attempt to combat fraud.
A decade after first introducing technology that replaces consumers’ card numbers with so-called tokens, the company is processing 1 billion such transactions a week, the payments firm’s chief executive, Michael Miebach, said in an interview. That’s after it took three years to process the first billion such transactions, Bloomberg reported.
Mastercard now plans to expand its use of the technology to replace security measures like passwords with biometric data such as fingerprints or facial scans, Miebach said. It’s the latest step the financial industry is taking to combat the growing problem of online payment fraud, which is expected to top $91 billion by 2028.
A decade ago, the common thinking was “if you want to stay secure, protect data and transactions with passwords,” Miebach said from Mastercard’s London offices. “That worked for a while. And then it started to become about vulnerability rather than effective security.”
Mastercard will eliminate card numbers
Mastercard and rival Visa Inc. first introduced token technology a decade ago, after fraudsters attacked the payment systems of retailers such as Target Corp. and Best Buy Co. and made off with tens of millions of consumers’ credit card data. Initially, the technology focused on replacing card numbers with a token that only networks can unlock, meaning it’s useless if a hacker gets hold of it.
Boosted by payment services like Apple Pay, it helped reduce fraud on in-store purchases. Now, however, criminals are targeting e-commerce sites that require consumers to manually enter their card information to make a purchase.
Mastercard will partner with banks and payment service providers around the world to replace these one-time passwords with a token based on consumers’ biometric information. The service launched this week in India, after partnering with PayU and banks such as Axis Bank Ltd.
“The root of the problem was that if data was exposed and someone accessed it, they could use it,” Miebach explained. “What is holding back the digital economy? The risk of data leaks, fraud, etc. And tokenization is a great lever to stop them.”
Mastercard has said it expects all e-commerce transactions to be tokenized in Europe by the end of the decade.
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2024-09-03 00:42:30
