Mikko Kähkönen, EVP Global Product ePayments, Giesecke+Devrient
Fraud losses are on the rise – global credit card fraud is expected to reach $43 billion this year. A combination of card-not-present (CNP) attacks, large-scale data breaches and the uptake of AI by criminals has sent fraud instances spiralling. Banks and issuers must take action to address this rapidly growing issue, but where does the solution lie? It might well be the humble payment card itself that puts up the strongest fight against fraud.
The evolution of card design
Long regarded as a simple payment tool, the physical payment card is now undergoing a makeover to help drastically reduce fraud. More are becoming minimalist in design; the PAN and account number are being removed to prevent them from being used if they fall into the wrong hands. Mastercard in Australia took the 16-digit card number from the physical card surface in 2025, with the sensitive information instead safely shifted into the user’s banking app.
It’s an effective first stage in improving security, but newer technologies are enhancing card capabilities even more. Dynamic CVV technology is a great example and has been designed specifically to tackle the ever-growing problem of CNP fraud, where compromised card details are utilised in either online or phone transactions. In the UK, it’s now making up as many as 70% of card fraud losses. The moment a static three-digit security code on a card is compromised, there’s little that can be done to prevent fraud.
Dynamic CVV codes can solve this problem by offering a new one-time verification code with every transaction, displayed via a very low-power e-ink display. If the code is stolen, it can’t be used for malicious purposes. Mobile banking apps can also be used here to refresh the code, enabling protection across online payments and contactless transactions. Because dynamic CVV codes don’t alter the use of a card in any way, users still receive all the same benefits.
Cards acting as authenticators
CVV codes represent just the tip of the iceberg in equipping physical cards with the tools to fight fraud. Payment cards can also be FIDO authenticators – the global standard for multifactor authentication (MFA) to protect against a range of attack methods, such as SMS OTP attacks. Cards in the context can take care of areas such as secure payment confirmation, secure login and oversight of access controls.
Because cards can be used as a step-up authentication method with FIDO, this can allow for CNP transactions to be converted into card-present transactions by tapping a card on an NFC-enabled smartphone. This drastically reduces incidents of fraud.
While less so for low-value transactions, biometrics are being increasingly deployed for higher-value transactions that exceed the contactless limit. The user must put their thumb on the card before a transaction can happen, with approval only possible when a live pulse is detected.
Keeping customer convenience at the forefront
With protection techniques evolving at a rapid scale, the industry must ensure that the customer experience isn’t left behind. A good example is low-value everyday payments. If users have to undertake a three-step authentication check during each one, they may end up unnecessarily frustrated.
Biometrics are proving particularly valuable here. Users can’t forget or misplace their fingerprints; every transaction is going to be seamless. But where transactions look suspicious, extra checks should still happen. It’s all about flexibility to ensure that security is adapted to each individual transaction.
Card security needs to keep up with fraud
Fraud is moving at speed, and card security needs to keep the same pace. As malicious actors take advantage of new technologies to attain card details, banks and issuers need to enhance the security of the physical payment card. Minimal designs are a strong starting point, but dynamic CVVs can tackle CNP fraud by invalidating stolen details. Cards can even be authenticators themselves, with biometrics proving very hard to crack. Together, these innovations can make the payment card an active participant in fraud prevention.