US banks team up to improve digital payments safety

US banks team up to improve digital payments safety

The Clearing House (TCH) is working with America's biggest banks on an industry-wide "dynamic credentialing" system that will improve the safety of digital payments.

TCH and its 22 member banks - including the likes of BofA, Citi and US Bank - are currently developing a pilot programme to test an open standard system that improves security for mobile transactions.

The test will seek to boosts customer account information safeguards by cutting the amount of sensitive information, such as card numbers, stored across multiple retailers, virtual wallet providers and others.

The pilot will test customers' ability to use their handset to make a purchase within a mobile wallet and at the point-of-sale. The participant's actual account number will be replaced by the issuing bank with a randomly generated temporary number, or dynamic credential, for processing the transaction.

This, says TCH, protects a customer's account information behind bank firewalls and lowers the potential for fraud in digital payments.

Richard Davis, chairman, president and CEO, US Bancorp and chairman, TCH, says: "Financial institutions have always been the stewards of safe and sound payment systems. As an industry, we want to do what we can to ensure that privacy and fraud protection are built into all types of digital payments."

Paul Galant, CEO, Citi Enterprise Payments, adds: "This initiative is designed to provide important new ways to protect customer account information and increase customer confidence in the security of the payment systems."

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