A patent for software that tackles card not present (CNP) fraud, as well as cross border card fraud, is expected to fetch at least $500,000 when it goes up for auction in Chicago later this month.
The on/off card patent is being sold by CDCK, a Delaware-based firm that focuses on cross border and Internet credit card fraud prevention.
The technology enables customers to block the use of their card and decide the precise conditions under which it can be authorised or rejected for payment by the issuer. The card can then be unblocked at any time by the genuine user.
"The solution enables the cardholder to take control by blocking the use of their card for these specific types of transactions until the occasion arises when they are on holiday or wish to make an Internet or telephone purchase," says Dominique Laage, president, CDCK. "In this way, no one else can use their card details to carry out either card not present transaction or payments abroad as the transactions would be blocked."
UK payment association Apacs recently published figures showing a massive 126% rise in fraud committed on UK cards abroad in the six months to June 2007. There was also 44% jump in card not present fraud, which rose from £95.3 million to £137 million.
Apacs says that the success of chip and PIN in preventing domestic card fraud has forced criminals to target the Internet and UK cards abroad.