Reducing Card Fraud

As payments technology continues to be one of the biggest focus areas for financial services companies, quite a few solutions have come out to help banks and other card issuers fight debit and credit card fraud.

Two of the largest French banks, Societe Generale and Group BPCE, are launching one potential solution from Oberthur Technologies. Their technology, called MotionCode, refreshes the physical security code on the back of the card every hour for three years. The idea is that if fraudsters steal your physical card or information online, it will quickly be out of date, thus stopping additional fraud.

Going a few steps further, Final has launched a credit card that can issue a unique virtual card number for each online merchant you shop at, or even for each purchase. You can then manage and track your individual numbers as if they were separate cards. In addition, the service provides a mobile app that keeps your receipts and allows you to manage your cards. The physical card, however, is a standard EMV card.

One downside of the above options is that you need to replace your current card – either expensive for the bank, or, in the case of Final, a hassle to switch your financial provider. One solution that leverages your existing card is CVV+ from Tender Armour. With a goal of ensuring that security does not get in the way of the customer’s experience, the CVV+ technology provides users with a new security code each day or on demand through multiple channels (text, email, online banking).

For those of you going to Money 20/20, the CEO of Tender Armour is pitching at the StartUp Pitch on Monday afternoon, so you will have a chance to hear about the technology and company in person.

I expect to see many more solutions come out to fight card fraud – the winners will be those that are easy for banks and card issuers to implement, are effective at fighting fraud, and integrate seamlessly with a customer’s shopping experience. Personally, I think this is an area where a successful fintech startup will be selling their services to banks, rather than convincing consumers to switch providers just for the sake of an ever-changing card number, unless the issuer adds additional services.

Medical Poinf of Sale Financing
Another company is entering the fray of medical lending in competition against CareCredit. Finrise has raised a mix of debt and equity to the tune of $5.4 million (and called CareCredit a “scourge on the American economy”). While Finrise does make loans, it is also integrated into a healthcare portal which also handles appointments and billing. They have launched first with veterinarians and will expand into other verticals after that.

China has thoughts on blockchain
China has released a whitepaper (useless link unless you read Chinese) on blockchain, exploring applications in education, social welfare, supply chain, and manufacturing. However, finance is the first area that they expect an impact, including the popular segments such as payments, smart contracts, and asset management.

Marketplace Lenders seek to self-regulate
2016 has been full of turmoil both for marketplace lenders and traditional banks. It started with LendingClub’s CEO resigning, followed by the Wells Fargo fiasco, and fines to LendUp and Navy Federal Credit Union. In the midst of this, marketplace lenders have been scrambling to establish credible industry associations to show that they take compliance seriously. Two recent efforts include the Marketplace Lending Association and the Innovative Lending Platform Association.