A Credit Card Digital Fingerprint That Looks At Three Months Of Payments

Back about 14 months ago, much was written of a credit card fingerprint trial from Fifth Third Bank. The idea back then was to take a full snapshot of the card at a point where it can be assumed that card is valid, such as at the point of its manufacture.

One card reader vendor, MagTek, is taking that digital fingerprint approach and making it a little easier, using 2010 technology. But instead of grabbing the card at its birth—something that Fifth Third didn't even try to do—MagTek is simply capturing the card the first time the vendor sees it as one of its POS stations.

But instead of assuming the card is valid, MagTek puts it into a "maybe yes, maybe no" state. It then waits through three billing cycles. If no fraud is caught and everything in paid and paid on time during those three cycles, the system assumes the card is legitimate and removes the flags. Now MagTek knows what to look for if it's presented with a clone of that card.

The other element that has changed since last year, according to MagTek Chief Security Officer Tom Patterson, is pricing and equipment. "About 14 months ago, it involved a second circuit board wired into the POS," Patterson said. Today, all that's needed is an ASIC stuck to the back of a magnetic read head, which makes installation a lot faster and the hardware much lower cost.