Photo: CNN Money
LEVALLOIS-PERRET, France—A French company has introduced a prototype credit card with a constantly changing CVV code—a fraud-fighting solution some say could be more effective than chip and PIN.
But its high cost is likely to discourage many FIs from signing on.
Manufactured by Oberthur Technologies, if the card technology catches on financial institutions could offer it in 2017.
The mini CVV “ink screen” (see photo) is powered by a lithium-ion battery the size of a postage stamp that's designed to last three years. A computer chip randomizes the number every 40 or 60 minutes. Engineers have managed to squeeze it all into a regular, 0.76 millimeter-thick card.
The changing code renders the card useless to anyone who has stolen the cardholder’s credit card number, expiration date and the code on the back.
Analysts have called the prototype a more complete solution to card fraud than EMV. The dynamic CVV code essentially becomes a temporary password verified by the FI with every transaction, so stolen data is useless after the first few minutes, according to a report on CNN Money.
"The hope here is that the dynamic CVV will severely cut down on fraud," Martin Ferenczi, Oberthur's top executive in North America, told the publication.
One major barrier, though, is that each card is 50 times more expensive than the magnetic stripe cards still being issued by banks and credit unions in the United States. And it's 10 times more expensive than the latest chip-based cards.
FIs buy magnetic stripe cards for about 20 cents each. Modern chip cards go for about $1.20. Oberthur plans to sell the dynamic CVV cards for $10 to $20 each.
“This is certainly an interesting concept,” said Bill Hardekopf, CEO of Lowcards.com. “But my concern is the price. That said, when a new technology first comes out it is always very expensive. But, companies refine production, competition comes in, and the cost goes down.”