California-based start-up QSecure has launched its patented SmartStripe technology which incorporates dynamic cryptography on the magnetic stripe of a plastic payment card to generates a one-time authentication number for each purchase.
The SmartStripe technology protects against counterfeit fraud without requiring changes in retail and card processing systems or cardholder behaviour, says the vendor.
The technology secures credit and debit card transactions through a proprietary chip embedded in the magnetic stripe on the card. Each time a SmartStripe-enabled card is used, the chip programs a unique cryptographic number that is valid for only one transaction. A new number is generated for every transaction.
QSecure says if the card's data is compromised, and criminals attempt to re-use the data from the stripe, card issuers will be able to stop the transaction in real time.
"Consumers are understandably concerned that their card data can be compromised any time they hand a card to a waiter at a restaurant or if their data is stored by a retailer whose database or network gets hacked, like TJ Maxx," says QSecure CEO and president V David Watkins. "Credit cards embedded with our SmartStripe technology eliminate that problem, as any compromised card data would be useless for additional fraudulent transactions."
QSecure says it is working on programs with major card issuers expected to start by 2008. Future products will incorporate a small, flexible display to secure online and other card-not-present transactions.
QSecure was founded in 2003 by ViVOtech co-founder Kerry Brown. The firm has raised $17 million in series a and series b funding from investors including Allegis Capital, Worldview Technology Partners, UMC Capital and Société Générale.