Mastercard is planning a big update to how it secures credit card transactions.
The financial services brand is currently testing what it calls “next-generation biometric card” technology in South Africa. The cards come with built-in fingerprint sensors like those consumers would find in an iPhone that authenticate purchases at the register. If the person’s fingerprint is registered, the purchase will be completed. If not, the card will be rejected.
In order to use the technology, Mastercard (MA) users will need to register their cards with their financial institutions. Their fingerprints are converted into an “encrypted digital template,” which will be stored on the cards for future use.
Now armed with the card, a shopper slips the card into a payment terminal while placing a finger over the fingerprint sensor. The sensor ensures the fingerprint matches the template. If so, the purchase is completed.
The credit card industry is continually seeking new ways to improve security. Malicious hackers have used a variety of methods for stealing credit card numbers, forcing companies to boost security at retail terminals, include verification chips in their cards, and more.
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Meanwhile, companies like Apple (AAPL) and Google (GOOGL) have been investing heavily in mobile payment services that they say could significantly improve card security.
Apple Pay users, for instance, can store credit card information in the company’s digital wallet. When users are ready to make a purchase, they simply hover their iPhones over a payment terminal while placing a finger on the Touch ID fingerprint sensor built into the iPhone. If the fingerprint matches what’s on file, the payment is made. All the while, user credit card numbers are never shared with retailers, limiting chances of someone hacking the retailer and stealing numbers.
In a statement on Thursday, Mastercard said that its fingerprint-sensing technology will similarly boost credit card security. The company says that banks and other card issuers should find that the technology “helps detect and prevent fraud.” The cards will also work with existing terminals, so merchants won’t need to invest in new equipment.
Looking ahead, Mastercard plans to continue to test the card technology, which won’t add any thickness to a standard credit card, in South Africa and will expand trials to Europe and Asia-Pacific within the next few months. The company didn’t say when it plans a broader rollout.
Mastercard also promised a “contactless” version of its card technology for the future, which would ostensibly let users make payments without ever inserting their card into the terminal.
