PNC Bank Pilot Tests Cards with Dynamic Security Codes

Home » FinTech » FinTech News » PNC Bank Pilot Tests Cards with Dynamic Security Codes

PNC Bank Pilot Tests Cards with Dynamic Security Codes

When U.S. banks and retailers began rolling out EMV chip cards to replace the old standard of magnetic strip swipes, the hope was that the move would reduce fraud. However, while the tokenized transactions that EMV chip payments offer has been said to reduce “card-present” counterfeit fraud, the same cannot be said for purchases made online as card numbers are still entered manually. Now one sizeable bank is testing an upgraded EMV card that also features dynamic security codes.

According to Ars Technica, Pittsburgh-based PNC Bank is currently conducting a pilot program to test Card Verification Value (CVV) that change after a certain period of time. This is accomplished via a timer located in the card as well as a digital display called an “e-ink screen.” Just as cardholders currently look to the back of their cards to find the three or four-digit CVV, these displays are placed in about the same area of the card, although the number shown will change.

Speaking to the Pittsburgh Post-Gazette, PNC executive vice president and treasury management unit head of product management Christopher Ward addressed the reasons why the bank turned to dynamic CVV. He said, “We’re constantly looking for ways to reduce fraud It’s harder for [crooks] to make counterfeit cards now because of chips … so fraud has moved to the card-not-present space.” Ward also noted that the bank is evaluating a certain refresh interval as part of the pilot program but declined to say what that was.

Currently PNC’s test program is set to last for 90 days, after which Ward says the bank is looking to expand the offering to more of its corporate cards. However it’s unclear when the technology might roll out to the majority of cardholders. Likely holding back that expansion is the cost associated with manufacturing the upgraded cards. The Post-Gazette suggests that, while a typical EMV card might cost $2 to $4 to produce, a card equipped with dynamic CVV can cost $15. On top of that, the battery required to power the device might last four years with a longer refresh interval but shortening that refresh window would mean cards need to be replaced even sooner.

Of course PNC aren’t the only ones looking to stomp out online credit card fraud. For example the website Privacy.com allows users to create single-use and/or merchant specific card numbers to help protect their actual card data when shopping online. Moreover Ars Technica notes that Idemia, which is distributing the dynamic CVV cards for PNC, first announced the technology back in 2016. While it’s too early to say whether this approach will prove to be a practical solution to the growing fraud problem, it once again shows how FinTech ideas can not only come in many forms but can also help established institutions evolve for the better.

Comments

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Author

Jonathan Dyer

I'm a small town guy living in Los Angeles looking to make solid financial decisions. I write for a number of finance websites, including HuffingtonPost and Business2Community. I founded DyerNews.com in 2015 to focus on personal finance and the emerging FinTech markets.

Other Articles by Jonathan Dyer

Facebook Officially Unveils Libra Cryptocurrency Plans

After months of speculation, reports, and some incorrect guesses to what its name would be, yesterday Facebook finally announced plans for its cryptocurrency - Libra. As expected the project includes partnerships with multiple brands and companies that will accept the token. Meanwhile Facebook will launch a wallet called Calibra for...

Discover Bank Discontinues Fees For Deposit Accounts

To say that Americans don't tend to harbor great feelings toward large banks would be a bit of an understatement. Thus, while too-big-to-fail institutions continue to be known for increasing fees and decreasing services, online banks and FinTech startups have sought to offer an alternative. Now one major online-only bank...

Survey Finds Majority of Americans Want a Fed Rate Cut

When the Federal Reserve meets this week, for the first time in months the big question will not be whether or not they'll raise interest rates but whether they might cut them. According to the personal finance site WalletHub, there's a 23% chance they do so during their next session,...