VISA: Aussie battery-powered supercard could prevent $1 billion fraud per year

It comes with a built in numeric keypad, its own microprocessor, and a once-only PIN number. It doesn’t yet have its own chat show, or perform minor surgery. The supercard is already getting some very practical applications from VISA.

It's also just possible that the huge online credit card fraud industry, which affected 383,300 people in Australia alone last year, might be out of the equation. The Sydney Morning Herald:

Each card costs about five times more than a regular credit card to produce and will be sold to bank customers during overseas trials for between $US18 and $US30 each.

The technology was developed over 2½ years by a small Deloitte-backed technology firm called EMUE Technologies based in Adelaide and Melbourne.

The two founders previously worked in banking security and technology companies.

This week Visa announced it was piloting EMUE's technology at one bank each in Britain, Israel, Switzerland and Italy. The bank in Britain is Bank of America.

Typically, with any Australian invention, it’s getting tried out overseas, before we get a look at it in Australia. If the kangaroo had been an Australian invention, it would have been tested in Norway, patented in Switzerland, and manufactured in Ireland, and exported back to us.

"The interest in this solution in the industry has been overwhelming and we look forward to working with the banks involved in the pilots to gain greater insights into how effective this solution can be in the longer term," Sandra Alzetta, head of innovation and new products at Visa Europe, said.

The fraud tsunami is global, and it's based on user security problems. The fatal flaw is that banks may have great security systems, but can’t prevent loss of credit card details. The ideas are a bit more practical, this time.

With EMUE's technology, even if all of these details are stolen the hacker is unable to make any online transactions because the security code is different each time.

Whenever users want to buy something online, they give the online merchant their credit card and expiry date as normal.

But instead of using a static three-digit security code typically found on the back of the card, the user enters the PIN on the card's keypad and uses the one-time number generated by the card as the security code.

I’ve often thought the only real solution to crime was pure bloody-mindedness. Another option would be a special booby trap on cards and accounts redirecting all known spam to the hackers. They’d be out of business in an hour. Then they'd have to fill in a form...