Credit Card Security Features

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Today, the financial landscape is fast-paced. Credit cards have become essential for managing expenses and online transactions. However, the convenience that comes with credit cards also needs robust security measures to tackle fraudulent and unauthorised access. In this post, let’s look at various security measures used to prevent frauds in credit card transactions.

1. EMV chip technology​

EMV technology stands for Europay, MasterCard, and Visa. It is a significant leap forward in terms of credit card security. IndusInd credit cards also use this technology. EMV enhances security by providing you protection against fraudulent and unauthorized transactions. The EMV chip is a small yet powerful microprocessor integrated into credit cards.

Unlike its predecessor, the magnetic stripe card, which stores static and unchanging data, the EMV chip generates a dynamic and unique code for each transaction. This unique code is the linchpin of EMV’s security prowess. It acts as a safeguard against one of the most pervasive threats in finance: card counterfeiting. With traditional magnetic stripe cards, it was easy for cybercriminals to copy card data and manufacture counterfeit cards, posing a significant risk to cardholders and financial institutions. However, the EMV chip’s unique code changes with every transaction, making cloned cards useless to fraudsters.

The EMV chip adds a layer of complexity. Even if someone manages to intercept the code from one transaction, it would be worthless for any subsequent unauthorised use. This advanced technology not only protects consumers but also provides a boost to the overall security of the payment ecosystem.

2. Contactless payment​

Contactless payments have experienced a surge in popularity. They give you a seamless experience along with robust security measures. This payment method enables a secure connection between your card and the payment terminal via near-field communication (NFC) technology. Encryption protocols ensure the confidentiality of payment details. Since physical card usage is decreased, it also reduces the risk of card theft, providing you with added security. With contactless payments, you can enjoy efficiency and security.

3. PIN (Personal Identification Number)​

A Personal Identification Number (PIN) is a vital security feature that enhances the safety of your financial transactions. You are required to choose the PIN for your card which is confidential and exclusive to you. It acts as your digital fingerprint that validates your identity before transactions. Since a PIN cannot be copied easily, it protects your credit card from fraudulent purchases or access to funds. If your card is lost or stolen, the PIN protects it from unauthorised purchases.

4. CVV (Card Verification Value)​

The CVV is a three-digit code located at the back of credit cards. It is used primarily for online and phone transactions for verification purposes. You need to have the physical card with you for transactions as the CVV is printed on the card. This way, your card is secure from unauthorised use.

5. Two-factor authentication (2FA)​

All Credit cards offer two-factor authentication (2FA) for online transactions. This involves an additional verification step after logging in. As soon as you log in with your user ID and password, you will get a one-time PIN (OTP) on your registered mobile or email. You need to enter this code to finalise the sign-in or transaction. This way the 2FA ensures that the transaction is being done by the account holder.
However, there is still a problem. Two-factor authentication (via OTP) does not work for international transactions. Just entering CVV is sufficient. This is where setting transaction limit can help.

6. Transaction alerts​

All credit cards provide real-time alerts via text message and email for every transaction on your credit card. These alerts enable you to track and report any unauthorised or suspicious activities, preventing further fraudulent transactions.

7. Transaction preferences​

All credit cards provide you with the control to manage your transaction preferences. You can choose how you want to use your card. You can enable or disable preferences such as domestic transactions and international transactions. For example, if you do not want to use your credit card for international online transactions, you can disable this simply via SMS or through the App. This feature gives you complete control over how your credit card is used, making transactions more secure. You can also block/unblock your credit card to protect it from unauthorised use.

8. Transaction limits​

There are 4 types of transactions.

1. Point of sale (where you swipe your card)
2. Online
3. ATM cash withdrawal
4. Contactless (NFC payment)

And these transactions could be domestic or international. Essentially 4 x 2 = 8 combinations.

You can now set enable/disable these 8 types of transactions. You can even set transaction limit for each kind of transaction. And all this can be done instantly from the mobile app/website.

For instance, if you are not planning to travel abroad or don’t foresee using your card on websites outside India, you can simply disable all international transactions.
All credit cards allows you to fix and modify transaction limits on your credit card, through its app/online portal. You can set limits for online transactions, point-of-sale purchases, contactless transactions, and ATM withdrawals. Setting transaction limits prevents fraudulent transactions, as the transactions get rejected once they exceed the limit set by you.

9. Virtual Card​

Virtual cards are temporary credit cards similar to physical credit cards. They come with a temporary 16-digit number, expiry date and CVV number. What differentiates these cards from physical credit cards is that they can only be used for online transactions.

Virtual cards are safe because:

1. These cards are temporary and become invalid automatically after a certain number of transactions.
2. A few of these cards are single-use virtual credit cards that become invalid in case of a data breach.
3. You can cancel a virtual credit card easily which prevents fraudulent use of the card.

10. CVV (Card Verification Value)​

Used for online purchase. This is a 3-digit number (4 digit in a few cases) printed on the back of your card. You must enter the CVV while making online purchases with your credit card. You must keep the CVV secure and not share the CVV with anyone. However, since both the credit card number and the CVV are printed on your credit card, anyone who has access to your credit even for a few seconds will get to know of these details.

Conclusion​

In a world of digital transactions, credit card security is paramount. From EMV chips to biometric authentication, modern technological features offer protection against various cyber threats. With the use of PINs, CVVs, two-factor authentication, and cutting-edge technology, users can rely on their credit cards for secure transactions.

Be Aware and Know Your Rights and Liabilities​

Take precautions while using your credit card. Use above tips to avoid credit card frauds. However, frauds can still happen. Fraudsters will likely be ahead of you and me when it comes to technology. That’s why it is important to know your rights and liability in case you were to fall victim to a fraud.
And for you to report such activity quickly, you must first be aware of such activity. Therefore, it is extremely important that you keep your mobile number and email updated with your bank. Check your messages/emails regularly. If you notice anything suspicious, report to the bank.

 

[vine]

Virtual cards are going to be highly useful. Only issue I see is with refunds. If these can be allowed to exist as long as we want and generate new virtual cards as needed, then this will be the best security feature we can possibly have.