Why a Digital Display Can Replace the 3-Digit CVV Number?

In our third post in the series on ‘Emerging Use Cases’, David Orme, SVP of Sales and Marketing at IDEX Biometrics discusses why a digital display can replace the 3-Digit CVV Number.

The banking sector is about to make a huge leap into the world of biometric authentication, and it involves the longstanding use of three-digit card security codes.

Why replace the 3-Digit CVV number?

You are probably familiar with reading the Card Verification Value (CVV) number on the back of your debit or credit cards. There are flaws with this system, however, as scammers and thieves can copy the magnetic stripe–this also gives access to the CVV number. The cards are also vulnerable if lost or stolen because contactless payments can be used up to varying transaction values–depending on the area and receiver–without any extra layers of security.

Biometric authentication technology

We are currently witnessing a dramatic growth in the use of biometric technology in the banking sector, with China leading the way. In 2016, just above 70 percent of users were happy to pay with biometric payment methods in China via their phones with the use of fingerprint or facial recognition payment systems, according to TechCrunch (https://techcrunch.com/2018/11/13/biometrics-payment-china-singles-day/).

The banking sector is constantly tackling the increasing sophistication of fraudsters and scammers all over the world. This now means that having a unique identifier, such as a fingerprint or a facial image which cannot be copied, replicated or stolen, is an absolute must.

Two of the biggest UK names in the banking sector, Natwest and the Royal Bank of Scotland, have recently completed a bank card pilot which has added an embedded biometric finger sensor within the card. Visa and Mastercard have also started to rollout the new technology, recognizing its far superior levels of security.

These biometric payment methods are already gaining huge momentum, and they are about to incorporate a new digital display. The digital display can be used for a range of features including dynamic CVV to address card-not-present fraud, user-specific information such as account balance, or to provide feedback when enrolling the fingerprint.

The presence of this display means that the CVV number will no longer be required since this will be dynamically generated, and the current spending caps can be removed since new cards will be more secure. With all these increased security and technological possibilities, there is no doubt about it, the next big shift in biometrics will come from the banking sector.

According to The FinTech Times, banks are already very serious about rolling out this new technology, with 56 percent of the banks surveyed saying that they plan to introduce biometric cards for their customers (https://thefintechtimes.com/biometrics-banks/).

Now that we are faced with the COVID-19 outbreak, there is further pressure to go cashless and to follow proper hygiene measures. Thomas Olsen, a partner at Bain & Co. notes that merchants are repeatedly asking people to go completely cashless, citing coronavirus.

The idea of an embedded biometric finger sensor within the card has considerable appeal in this context. This will be absolutely for personal use and there is no exposure to the card moving from one hand to the other. It remains in the cardholder’s possession at all times.

There is no doubt that the pandemic will leave a deep and lasting impression on organizations and on the populous as a whole. It seems clear that this, together with the limitations of the current CVV system will drive the widespread adoption of on-card biometrics and facial biometric identification technologies.

New levels of security, increased awareness, remote enrollment and advances in digital displays have brought fingerprint authorization on payment cards one step closer for us all.

The previous post in our series on ‘Emerging Use Cases’ looked at why fingerprint authorization in payment cards is gaining importance.