Visa pilots new payment card security initiatives

Acknowledging the need for controls that go beyond those offered by the Payment Card Industry (PCI) Data Security Standard, a senior Visa Inc. executive Thursday described two new initiatives to reduce payment card fraud being tested by the company.

Visa drops processors from compliance list after breaches

One of the pilots involves Fifth Third Bank, which is testing the use of magnetic stripe technology to create unique digital fingerprints for cards, said Ellen Richey, Visa's chief enterprise risk officer. Each stripe contains unique characteristics that can be captured and used to verify the digital identity of the card, Richey said during at a security event being hosted by Visa today. The goal is to stop the creation and use of counterfeit cards based on stolen payment card data.

Another initiative, being piloted by retailer OfficeMax Inc., involves the use of a challenge-response technique at the point of sale. The project is aimed at testing the efficacy of asking consumers to respond to specific questions such as their ZIP code, the last four digits of their phone numbers, or the first three digits of their area codes, as part of the transaction approval process.

Dan Roeber, vice president and manager of merchant PCI compliance at Fifth Third, said the bank had rolled out about 1,000 card readers to retailers who have not been informed about the pilot effort. The terminals are capable of reading the magnetic stripe information and creating a "DNA picture" of the card which is then matched during the authorization process, against baseline information for that card stored by the card issuer, he said during a panel discussion at the event Thursday.

During the pilot process, baseline images or fingerprints for a card are created when it is first swiped through one of the new readers, Roeber said. But going forward, if the approach works, baseline images for each card could be created and stored during the card issuing process itself, Roeber said. "Even if somebody gets into a database and makes fraudulent cards, the DNS fingerprints are not going to match," Roeber said. "The thing I really like about this technology is that there are no key management issues," as is the case with the use of end to end encryption for protecting cardholder data.

"We are very excited about this technology," he said.

Fifth Third is one of several "acquiring banks," which are responsible for authorizing retailers to accept payment card transactions.

William Van Orman, treasurer for OfficeMax, said the retailer had rolled out its challenge-response process to about 1,000 of its stores across Illinois, Indiana and Florida. The process, which has required changes to point-of-sale systems at these locations, involves asking customers ZIP codes or other personal information after swiping a card. The responses are then matched against responses to these questions that were previously selected by the consumer.

For the pilot, the emphasis was on simply trying to understand what kind of changes needed to be made to the point-of-sale systems, and the kind of impact the new authorization process would have on merchants and consumers, Van Orman said. Customers were informed that the data was being requested for a pilot project and had the chance to opt out if they chose to, Orman said. After an initial six-month period, the pilot project has been extended by another four months at the request of Visa, he said. "Overall we think it's a successful project," he said.

For more enterprise computing news, visit Computerworld. Story copyright Computerworld, Inc.