As Fraud Moves to CNP, New Company Aims to ‘Armor’ Transactions (Dec. 9, 2015)
With EMV technology increasing security for card-present transactions, fraudsters are shifting their focus to the card-not-present (CNP) environment, including online, mobile and phone purchases—but new market entrant Tender Armor has a plan to increase security for CNP transactions. The company’s CvvPlus solution provides a daily security code via text or email that cardholders enter in place of a standard on-card CVV number when making a purchase online or over the phone. The code is kept separate from the payment card and account number, making it more secure than other on-card delivery methods, which can be compromised if a fraudster is able to gain access to the card, according to Tender Armor co-founder and CEO Madeline K. Aufseeser.
Formerly an analyst with Aite Group and a payments professional with nearly 30 years of industry experience, Aufseeser tells Paybefore a confluence of factors led her to believe the time was right for a solution that would bolster CNP security. “Fraud is migrating to CNP and online purchasing is growing exponentially. At the same time, merchants are moving toward providing a frictionless experience and asking consumers for less and less data, which can open the door to fraud,” Aufseeser tells Paybefore. Charge-offs on CNP transactions are projected to triple to $11.4 billion by 2018, she says—and it’s the card issuers who are left holding the bag for the majority of charge-off costs. With CvvPlus, issuers can reduce charge-off losses by preventing fraud before it occurs, rather than trying to remedy it after the fact, Aufseeser adds. Other benefits for issuers include reducing administrative expenses, minimizing card reissues and limiting cardholder attrition. Merchants can accept CvvPlus using their existing systems. Meanwhile, cardholders benefit from increased security with minimal friction. The dynamic CvvPlus code also can be used for in-store transactions that require a security code.
Aufseeser says the company is in talks with several potential partners and is exploring expansion opportunities in North America and Europe.
Click here for a video clip with more detail on CvvPlus.