Little-Used One-Time-Use Cards Might Have IT Payment Impact

A little discussed, rarely-used card offering from Bank of America and Citi—plus a few others—is something retail payments people should get to know. The product is a one-time-use so-called virtual card, where a consumer uses the card to make a single purchase and then deactivates it.

The downside for consumers is that they need to create a new card for almost every purchase they wish to make, which is far more effort than most consumers want to expend for a payment card. The upside, though, is a dramatically more effective shield against identity fraud, false charges and semi-legitimate retail charges from companies that make it awfully difficult to cancel the recurring fees.

But the cards, sold by Bank of America under the ShopSafe name, were created about a half-decade ago—along with zero-liability programs—to make consumers more comfortable with E-Commerce. Zero-liability certainly caught on and helped increase consumer comfort levels, but the virtual cards never took off nearly as well. "The cards have not caught on because consumers have gotten more comfortable with buying on the Internet," the Baltimore Sun quoted CEO Bill Hardekopf as saying. "They also have no serious marketing behind them and there's the matter of having to go on the Internet and generate a new number or set up restrictions for each purchase."

But what if that changes? Could fraud and repeating charge issues make these cards more popular? Could mobile commerce—which will test anew consumer comfort levels—create a second opportunity for them?

The bigger issue is "What if it does?" This system could cause serious chaos for retail IT. First, it could force the tracking—capture, storage—of a far greater number of card numbers. Just what the PCI doctor ordered.

Marketing will also share in the pain, as the typical—albeit unauthorized—assumptions that tracking a credit card of customer #1234 pretty much tracks customer #1234. That assumption—and all of the data decisions that hang off of that—would be tainted.

Marketing systems would suddenly interpret the data as meaning that customer satisfaction is plummeting, as repeat purchases plunge. In reality, repeat purchases might be as strong as ever, but single-use cards would fool the system into thinking that all of these new customers (who weren't really new customers at all) were buying one item and never returning.

On the plus side, widespread use of these cards could favorably impact card data protection issues, as stealing credit card numbers would start to become much less profitable. (And, yes, if it causes pain to software vendors that continually charge a card, despite requests to stop, well, we could live with that. Quite happily, actually. And, yes, Intuit, we're talking about you.)