Credit card fraud is one of the fastest growing crimes costing French banks over €41 million last year. The crime figures remain high despite progress already made and attempts by Interpol to fight fraud on a European scale.
Most of the cases of card fraud recorded last year involved stolen credit card numbers, which were used to buy goods or services either by phone or on the internet. Often fraud victims did not know their card had been used illegally until they received their monthly statement. The fact that most cases of credit card fraud are now virtual crimes makes perpetrators very hard to catch.
Credit card fraud is also a serious source of worry for many small businesses particularly internet start-up companies, which rely almost exclusively on credit card payments for online transactions.
While online credit card use accounts for only about 2% of Visa International's total credit card transactions, more than 50% of its discovered frauds/disputes relate to online use totalling over €1.6 billion a year.
French and Greek partners working in EUREKA project E! 2850 EUCLID have worked on a secure link between the cardholder and the issuing bank which they hope will double, treble or even quadruple the partners' initial € 1.1 million investment over the next three years.
"Current online payment systems are wide open to fraud. We believe that the only effective defence against card payment fraud is to empower each cardholder to turn on or off the use of their actual credit card number. The EUCLID solution protects the actual card account number where it counts most - at the issuing bank authorisation server," explains Vie.
Once a card is protected by EUCLID it is blocked unless the cardholder pre-approves its use by unblocking the card account before or at the time of a purchase.
"EUCLID enables credit card issuing banks to prevent unauthorized and fraudulent e-commerce, telephone and mail-order transactions," explains Sébastien Vie, Chief Financial Officer of the French lead partner, CDCK, and Financial Manager for the EUCLID project.
While validation of the process and development of the user interface is complete, other aspects of the project are still progressing. Greek partner LogicDis is trying to generate interest with a number of European banks. It is also working on a trial with one particular bank in Greece, developing a voice-operated server interface that allows the client to unblock their card by calling a free phone number.
"The EUREKA label gives recognition to our innovative solution. It strengthens our technical credibility with our clients and facilitates our launch in the European market," says Dominic Laage, President and Founder of CDCK.
Source: Eurekalert & othersLast reviewed: By John M. Grohol, Psy.D. on 21 Feb 2009
Published on PsychCentral.com. All rights reserved.
Show me a sane man and I will cure him for you.
-- Carl Jung