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As the threat of fraud continues to rise around the world, a growing number of banks are looking at innovative ways to protect themselves and their customers – and one solution that’s gaining traction is the use of dynamic CVVs in order to cut down on card not present (CNP) fraud.

CNP fraud is one of the major challenges facing the ecommerce market and one that is set to affect millions of people every year. Indeed, many consumers are already pessimistic about their chances of avoiding fraud as online payments become more common.

In the US, for instance, recent research by Symantec reveals almost half of consumers (47 per cent) report being affected by cyber crime, while 80 per cent are concerned they will fall victim to such problems.

CNP fraud has soared in many developed countries where EMV has become standard, as fraudsters have shifted their focus online. The rollout of chip cards in the US, which is already a huge market for fraudsters, could drive yet further growth in CNP crimes.

Therefore, anything that banks can do to reduce this risk will be hugely important in rebuilding customer trust and giving individuals the confidence to make online payments.

CVVs are already widely used as a security check during online payments, as the data is difficult to obtain without a fraudster having the card in front of them. However, it is not infallible, and if a criminal is able to access this information, for example as a result of a data breach, there is little that can be done to prevent it.

The rise of dynamic CVVs

Dynamic CVVs could have a key role to play in combating this problem, and banks around the world are showing a growing interest in the technology. One of the first to undergo a commercial rollout of this will be Mexican bank BBVA Bancomer, which is implementing a dynamic solution in its mobile wallet application.

The innovation will see the static three-digit CVV code replaced with a time-based dynamic CVV/CVC that is unique to each transaction. This should therefore ensure that the user experience when making online payments is not affected, but reduces the risk of stolen credit and debit card numbers being used in fraud.

Hugo Najera Alva, general director of digital banking at BBVA Bancomer, noted that although ecommerce is growing rapidly, some customers are deterred from using the offerings due to a lack of trust. He added that the response to the dynamic CVV solution has so far been “outstanding”, with more than 100,000 active users signed up in the first weeks of the project.

BBVA Bancomer is not the only financial institution looking to implement dynamic CVV technology. In France, BNP Paribas has also announced a pilot scheme that will see the static three-digit code on the back of a payment card replaced with a screen, which will display a security code that is regularly refreshed.

Marc Espagnon, head of payment and cash management at the bank, explained: “The trial is fully in line with BNP Paribas’ desire to constantly improve our customer experience. By testing this solution with our customers in France, we believe that we will increase their confidence in online payments through increased security.”

The future of card payments?

Dynamic CVVs can be likened to tokenisation – the process of using single-use codes to authorise a transaction. Greater use of technologies such as dynamic CVVs and tokenisation will be vital to combat fraud in online and mobile payments. Merchants that request CVV information for all transactions already stand well-placed to minimise CNP fraud, but with banks now also doing their bit to clamp down on the issue, the payments industry can help reduce losses and drive up consumer confidence.


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James W. Gabberty

Gabberty is a professor of information systems at Pace University in New York City. An alumnus of the Massachusetts Institute of Technology and New York University Polytechnic Institute, he has served as an expert witness in telecommunication and information security at the federal and state levels and holds numerous certifications from SANS & ISACA.

Marisa Mann

Marisa Mann brings over 15 years of experience in consulting and financial services industries to the Solstice team, working on large scale enterprise initiatives across many technologies, including specializing in the digital space – Internet and mobile. Mann is passionate about mobile and the endless possibilities for the enterprise, delivering business value through strong brand recognition and driving to excellence in the consumer experience. Prior to Solstice, Mann worked at JP Morgan Chase, Diamond Management and Technology Consultants, Washington Mutual, Inc, and Accenture.

Brad Strothkamp

Zachary Ehrlich

25-year-old writer, and as a native San Franciscan, I am unreasonably loyal to Bank of America, if only for their superhero-like origin story, involving the 1906 earthquake and Italian fruit vendors.