Numberless Bank Cards Coming to Australia to Combat Fraud

European banks have been doing it for 5 years, but now an Australian bank has announced it’s adopting numberless debit cards and others are expected to follow.
Numberless Bank Cards Coming to Australia to Combat Fraud
Mastercard credit cards are displayed in this picture illustration taken on Dec. 8, 2017. Benoit Tessier/Reuters
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AMP has become the first bank in Australia to announce it’s introducing numberless debit cards for its customers in a joint program with Mastercard, with others expected to follow.

Mastercard says it plans to end using the traditional 16-digit number on physical credit and debit cards by 2030, replacing it with tokenisation and biometric authentication.

It says the change will help reduce fraud and minimise consumers’ exposure to large-scale data breaches.

For online purchases, Mastercard plans to phase out manual card and password entry by the end of the decade, replacing it with facial recognition and fingerprints. This will, it says, require “secure on-device biometrics,” meaning people would be forced to use these features even if they preferred not to.

Mastercard head of security solutions Johan Gerber said Australia accounts for about a quarter of all fraud detected by Mastercard globally.

Fraud rates are seven times higher online than in stores, he added.

More Sales For Online Retailers

Aside from the security enhancements, the company also promotes the fact that the technology will help reduce or eliminate the 25 percent of online shopping carts which Mastercard research says are abandoned because “nearly two-thirds of shoppers still struggle through manually entering their card details.”

Mastercard says that introducing tokenisation has already reduced cart abandonment and increased transaction approvals by three to six percentage points. This generates up to $3.2 billion ($2 billion) in additional sales for merchants each month.

Senior executives from the company flew to Melbourne last week to meet with Australian bank and merchant partners and discuss the company’s product roadmap for the next five years.

Numberless AMP Bank debit cards will be issued starting February as part of its new mobile-first digital bank, which has signed a strategic partnership agreement with MasterCard.

Not only will customers be encouraged to use face and fingerprint ID to enter the app, but they will also be prompted to record a video selfie when they first sign up, which the bank says helps prevent identity theft.

AMP is basing its app on “Engine by Starling,” the technology that enabled the UK’s Starling Bank to become the country’s first profitable digital bank. Since its launch in 2017, Starling Bank has attracted more than 4.5 million small business and retail customer accounts.

European banks have been using numberless cards for around five years.
In over 70 markets—though not the United States or Australia—Mastercard offers a physical card with a built-in thumbprint scanner. It claims this takes just five minutes to set up and can be done at home using a disposable device.

What Are Tokens?

A digital authentication token is a unique, encrypted piece of data that acts like a temporary “ticket” to verify a user’s identity when accessing a system or app, allowing them to log in without repeatedly entering their password.

Essentially, once users authenticate themselves with their credentials, the system generates a token. This is then used to confirm their identity for subsequent requests within a specific timeframe.

A token typically consists of three parts: a header (identifying the token type and signing algorithm), a payload (containing user information), and a signature (used to verify the token’s authenticity).

When a user tries to access a protected resource, they send the token with their request. The system verifies the token’s validity by checking the signature and ensuring it hasn’t expired.

Rex Widerstrom
Rex Widerstrom
Author
Rex Widerstrom is a New Zealand-based reporter with over 40 years of experience in media, including radio and print. He is currently a presenter for Hutt Radio.