Visa Creates Another Fraud Monster
Although Chip and PIN was marketed as a security product, we all know by now that it was really about If we can do more transactions per second we can get more money. Now Visa is offering up another Let’s do it faster product that looks like it will virtually hand out financial information to the bad guys that want it, just like the other “contactless payment” technology.
In partnership with Nokia and Google, Visa is rolling out contactless payments, remote payments, and money transfers by cell phone. That’s right, wave your Nokia 6212 phone near a POS reader and you’ve made a payment by credit card; or given your account information to a thief under the moniker of Near-Field Communications.
Don’t take my word for it. Read more about it
here and
and here.
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- Visa Doesn’t Like Merchants
- Disposable Credit Card Numbers - Not All Bad
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Payment by phone is big in Japan and they have been using it for quite a while now. I think South Korea as well. Do we know how secure it is over there?
October 7th, 2008 at 3:33 pmI don't have any hard evidence one way or the other, but I refer you to a couple of my previous blog posts:
http://www.merchant911.org/blog/index.php/2008/09/17/united-states-credit-card-fraud-is-about-to-increase/
http://www.merchant911.org/blog/index.php/2008/09/03/credit-card-companies-insecure-about-security/
http://www.merchant911.org/blog/index.php/2008/08/16/chip-and-pin-fraud/
What I'm seeing here is that contactless payment just isn't secure. Period. End of paragraph.
This technology cold be different, but given Visa and MC's track record on security, I won't count on it.
October 7th, 2008 at 4:03 pmNokia were testing this in Sweden, if my memory serves me well, since 1998. To date, I have not heard of any fraud related actions with this technology. Maybe the security aspect has not been publicly revealed in order to avoid letting the bad guys come up with a loophole?
October 8th, 2008 at 11:47 pm@ Adrian:
That's possible. I think most security folks would tell you that security by obscurity isn't one of the better methods. It's also possible that since it was only under test, the bad guys haven't been working too hard at it. They look at things like return on investment.
This could end up being very safe technology but the history of contactless payment is short and so far not very safe.
The up side of the Visa/Nokia roll out is that they are also incorporating immediate notification of use of the account. That, in my mind, is a good thing.
October 9th, 2008 at 7:25 amFunny, I can remember back around 2000 being asked by my processor to hang up and call back on a land line because cell phone transmissions could be intercepted.
October 20th, 2008 at 9:39 am