Credit card fraud continues to be an issue, for banks as well for consumers. I remember 15 years ago they had photos on credit cards, I am not sure why they stopped doing that, that seems to be a simple solution to reduce fraud.

Now they are turning to technology to do the job, but often it solves one problem but creates another one. Think about the RFIP credit card, the idea makes sense since all you need to wave your card at the cashier and the chip supplies the card's number and expiry date through radio waves and print our a receipt. There is no opportunity for criminals to copy it since the card remains in your pocket during the purchase.


Some people raised concern over the encryption that can cause security concern. You can easily set up a gate antenna to scan people’s car when they walk past. The idea is great for small purchase such as cup of coffee or vending machine etc. Take a look at the chip-and-Pin card which has been standard in Asia for years, it is now coming to the US and Canada. Can the PIN solves the problem? I am not sure.


There are more serious problems than frauds in terms of credit card. It should do more than just a spending mechanism. Should we put warning signs on credit cards the same way we do for tobacco? Why not? Let’s talk about the fraud prevention side, a company in the UK has come up with a solution that allowed us to turn off and on a credit card. Yes, a credit card with switch.

The London based CardSwitch Technology has started offering its credit unions under the name of CardLock. There are still some patent issues with Visa who applied for the patent a year later. Basically the product enables cardholders to define their own user limits and prohibitions and turn them on and off.


And then there are cards that have magnetic strips can be written upon. The two-accounts-in-one card allows user to press a button to switch the card from one account to another. Second, he showed a security-enabled card that kept both the magnetic stripe and the human-readable number on the front of the card obscured until a security code was entered in.


Here is a cool idea, I think we should explore how a credit card needs to be enabled by a cell phone, instead of a PIN, use the cell phone as a PIN. So if someone steal the data on your card but without the cell phone activation, it will not work. This is an easy solution. The cell phone will also allows real time checking on spending and provide summary of spend and warns you about over spending. With a card (and a cell phone), I can view real-time data on my spending (or the spouse of children). Any warning will be posted on my Facebook page and informing both the account holders and the supplementary card users. That's how to make spending social. I like this idea.

The credit card needs to do more than just making itself secured, it should have mechanism to help people who has less self-control. A lot of innovation is needed here and we don’t see enough.

Original Post: http://mootee.typepad.com/innovation_playground/2010/09/whats-the-latest-innovation-from-credit-card-companies-it-is-time-and-they-need-to-do-more-we-need-t.html