Credit cards - how does it make sense?

Lucas Siqueira

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here in Brazil we have the nubank is a fintech (digital bank), it has the option for you to create a virtual card and then delete it for these unique purchases. for me, it's the best bank here in Brazil
 

Derek Johnson

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Erel said:
Why don't we have a temporary and unique key that we can give to each vendor, maybe time limited???
Click to expand...

It seems to me that this is how Google Pay operates. Google Pay could add a feature that generates a Unique Card Number and PIN for an individual transaction so that you could quote that instead of the real one.
 
A

AirLink

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Having your credit card details recorded on a piece of paper is highly insecure. Our banks now require 2 factor confirmation with a password inside the bank app for every online transaction. (used to be a SMS code but apparently that was insecure). I had a vacation booked in Italy many years ago (>15) and while at the hotel reception I noticed the clerk had the full credit card details for every reservation noted in a paper registry. One could have easily snapped a photo of that when the clerk was away or not looking and profit. Someone apparently did as several weeks later I started having suspect transactions billed on that card.

Now I use Revolut for the majority of payments (excellent currency conversion rates for online payments or when traveling abroad) and with a premium plan you have the option to generate disposable virtual cards. Here's the way it works:

Disposable virtual cards are one-time use cards generated securely in the app. These cards are designed as an extra-secure solution for making online payments at merchants you do not know or trust.

After you've made an online payment with your disposable card, we’ll automatically block those details from being used again. This means if the card details are stolen, the fraudster won’t be able to make any payments with your card.

We'll then generate new disposable card details for your next purchase.
 

AnandGupta

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So it is clear that different countries have different policies for online payment.

Regards,

Anand
 

Martin Larsen

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Derek Johnson said:
It seems to me that this is how Google Pay operates.
Click to expand...

Correct. Google Pay issues a new virtual credit card with a unique number for each use. Thus, if the receiving shop tries to copy the card (eg. via a modified terminal) it won't work because the copied card can be used only once. In that sense, Google Pay it much safer than physical credit cards.

Derek Johnson said:
Google Pay could add a feature that generates a Unique Card Number and PIN for an individual transaction so that you could quote that instead of the real one.
Click to expand...

Yes, that would solve the problem with phone orders. And even if the shop steals the card for the first order (and leaves Erel hungry) it can only be misused once.
 
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iCAB

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I think looking at this problem from a technology point of view is not right. It's a bit more complicated than that.
I don't think that the problem is related to the ability of creating the technology or not.
A simple approach of sending a link via an SMS to open a secure form, can reduce the fraud by a lot. But not all merchants are equipped with the above and not all customers are comfortable with it. It will also make completing the transaction a lot longer which many people don't tolerate. Also keep in mind that many of the older generation are not very comfortable with the technology and that's why the old school way of doing things continues to exist.

At the end of the day, the credit card companies are interested in how much money they are making using a specific approach.
Fraud, is part of the existing system, and one way or the other someone is paying for it (mainly merchants). Increasing the base fee from 1.5% to 1.51% (if needed) is good enough to get all that money back and more.

An enforcement must come from the credit card companies (VISA, MC, AMEX , etc... ), otherwise payment gateways will not dare to enforce anything as they could be risking losing customers to others. At the same time, these companies (VISA, MC, AMEX , etc... ) are also competing for market share..

So it will take a bit of time to have a smooth transition.
 

Alejandro Moyano

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I totally agree, had time ago a complete ERP solution that must drop, a lot of work wasted because the system was not fast enough... one owner told me the true after all: he prefers an old software handled by numeric and F combinations because he reduce the time to charge money less than a minute, that haves a huge impact in customer mind as they less think about the payment they remember better the joyful of buy. Which incentive are going to have to implements new tech?

But i don't think that apply to payments gateways are easy, one of our upcoming ventures (near release) is an IA financial advising app, and most platforms don't wanna work with us (they told we are high risk), we are still checking how to charge our app.

PS: Excuses my English!
 

tufanv

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We have a virtual credit card option here in Turkey ( probably you have it too ), where you can create temporary credit cards attached to main credit card with totally different card number,expiry and cvc and you can set its limit before every order . So if the food will cost 32.21 USD you can set its limit to 32.21 USD and thats all.
 

Derek Johnson

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That would be good in the UK too!
 

Beja

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I use PayPal MasterCard and I always leave on it a few bucks.. it's not linked to my bank account. I temporary link it to add funds to PayPal then unlink.
If PayPal in your country doesn't offer debit cards then you can use a prepaid credit card and always leave a small amount on it. This way your bank account will always be safe.
 
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j_o_h_n

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Saw this thread again today and thought I'd mention a few of things that Revolut offer.
1: you can have a virtual card that you can freeze and unfreeze via the phone app. I guess this is handy if there is a site that stores card details for reuse (eg Amazon) but if you keep your card frozen and only unfreeze when you make a transaction then they cannot make a transaction independently.
2: Disposable virtual card: one time use only. Open the app generate a new card each time.
3: i send money to family via revolut using the contacts list on my phone, it's actually TOO easy!
I find i am using revolut more and more and my usual bank less. I still don't 100% trust that they won't go bust but I can see myself switching completely in time unless my bank starts to compete better.
 

Jhonn

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There is an option that is to have a card for online purchases, which is rechargeable, you recharge it when you go to buy and if there is no balance, even if they have the data, nothing can be charged
 

Beja

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Freezing wouldn't work for existing recurring schedule or authorization.. the only guaranteed way is to leave small amount on the card and never link it to the bank.
 
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