Mummy, What's a Card Number?

Banks are incubating plans to phase out the 16-digit card numbers on credit and debit cards, reported the Times recently.

A couple of things are driving this. First, the explosion in contactless and mobile banking apps, and secondly the rise in online shopping.

Removing 16-digit PANs from the front of cards is transforming the look and feel of payment cards, which from the outset over 50 years ago featured an embossed number on the front. What would remain on the front is the scheme & contactless logos, and maybe the word Debit or Credit.  

The explosion of contactless and mobile apps such as ApplePay is leveraging the token value embedded inside the chip which represents the card number in a tokenised form.  It’s still a value that the card payment systems can recognise as you, but it’s no longer a number that opens you up to Fraud Risk through skimming or copying by nefarious means.

This is building on an experience that is already underway in the United States.  UK Banks such as Starling and Revolut are already issuing cards with the number now featured on the reverse side of the card.  

So when will Card numbers be completely phased out?  No company has yet removed numbers completely from a card, but the recent trend of cardholders seemingly proud of their new possessions, to post images on Instagram, may have had something to do with this.

The Card Schemes themselves are working to protect card users and reduce their exposure to fraud.  MasterCard is rolling out a payment service that no longer requires the user to enter the card number.  Using their mobile App, users are redirected to a mobile wallet of cards maintained by MasterCard, from where the user selects the required card.  Visa are doubtless not far behind.  

One card scheme claims that we will experience more change in the next 5 years than we have in the last 50. But it will be evolution rather than revolution.

We’ve all experienced the growing number of data breaches at retailers and merchants over the recent years. So who can help?  The Card schemes spot an opportunity – Retailers today who keep our data as securely as they can for our convenience and comfort in making repeat purchases, would soon see the card schemes take over the role of e-wallet provider.  At the time of purchase, Visa or MasterCard would serve up a token to the merchant where you are making your purchase, but importantly it would only be the token and not your true card number, so the merchant would also be relieved from having sensitive data to store, even for a short while.

As a consumer, you’d see a pop-up box on your screen, and as a second layer of security, you’d be sent a one-time code via the App, to further authorise the transaction.

Fingerprint based cards are also starting to make an appearance.  These cards offer a secure biometric way to tie the cardholder to his or her card usage.

Of course we shouldn’t forget that the card industry still has to accommodate the needs of both merchants and customers.  And let’s face it, the Magnetic Stripe on the back of the card still lingers on and on; I’d like that stripe to be the next thing to disappear from my cards.