Barclaycard is conducting trials of a mobile chip card reader for PIN-based authentication of cardholders shopping online.
For the trials, to begin in February next year, 10,000 Barclaycard customers will receive a disconnected chip reader device from Belgian company Vasco that can fit in a pocket or wallet. When prompted to authenticate, they insert their card into their portable reader and tap in their four-digit PIN. The reader and the card then generate a unique dynamic password that is typed into the prompted field on the screen.
The solution is designed around MasterCard’s specifications and uses the Arcot TransFort 3-D Secure payment authentication platform. Arcot anticipates the system may serve as the foundation for enhanced identity management services in the future providing stronger authentication to applications such as home banking, electronic bill payment and wire transfers.
Ian Spencer, head of fraud of Barclaycard, says: "Allowing for secure authentication, from wherever a user happens to be, breaks down critical barriers to e-commerce making the shopping experience both secure and convenient for consumers."
The initiative comes as UK banks look for solutions to the growing menace of card not present fraud, which is set to overtake card cloning as the biggest source of industry losses.
The UK trials form one element of a three-pronged international Chip Authentication Programme conducted under the auspices of MasterCard. Other trials are underway in Brazil with RedeCard, and in Germany with the federal association of co-operative banks. Reader choice is currently offered from Xiring, Vasco and Todos.
A similar system for German Geldkarte users has been unveiled by SCM Microsystems. The mobile Sm@rtTAN Card Reader replaces cumbersome manual PIN authentication at the PC with a single-use code generated by a smart card and displayed by the reader. The pocket-sized device, which operates independently of a computer platform, can also read cash balances on the German cash card.