Revolut slashes fraud with disposable virtual cards

Digital banking startup Revolut is hailing its recent introduction of disposable virtual cards for online purchases, claiming a 30% reduction in card fraud cases.

  15 13 comments

Revolut slashes fraud with disposable virtual cards

Editorial

This content has been selected, created and edited by the Finextra editorial team based upon its relevance and interest to our community.

In March Revolut began letting customers create disposable virtual cards in seconds, with card details that automatically regenerate after every transaction. This means that, even if the credentials of a large online retailer are compromised, customers are protected as their card details are no longer in existence.

Nik Storonsky, CEO, Revolut, says: "The recent security breach at TicketMaster, where an unknown third-party managed to gain access to their customer’s personal information, was a sharp reminder to all of us here at Revolut as to why we prioritised the launch of disposable virtual cards."

Meanwhile, the bank is rolling out machine learning technology to boost its compliance efforts, applying personalised limits to customers based on their transactional activity. This means that individual risk ratings have been assigned to all of Revout's two million plus customers, who will begin to start to notice the existing limits being removed over the next couple of weeks.

"We are incredibly excited to launch the new state of the art dynamic risk scoring algorithm that is completely unseen in the finance industry. This will allow us to really focus our investigation efforts in targeting the suspicious activity and allow our normal users to use Revolut hassle free," says Alan Chang, VP, operations.

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Comments: (13)

Adrian Hausser

Adrian Hausser CEO at PayX International Ltd

I’m missing something here, virtual one time cards have been around for at least a decade if not two (https://en.m.wikipedia.org/wiki/Controlled_payment_number) so what is new/unique here, or is it another case of excellent UX again that revolut seems to do so well?

A Finextra member 

maybe the difference is that it is connected to the mobile app instead of via browser? 

A Finextra member 

How will any refunds be handled? 

A Finextra member 

@Adrian The difference is that controlled card number wouldn't renew for at least a couple of months whereas here the proposition is to renew it every transaction.

Regarding Refund, I am sure Revolut won't let the system "forget" the virtual card nunbers associated to an account so would surely know how to deal with a refund.

Sounds great to me as have been victim of fraud on credit card thrice in the last 5 years.

Ketharaman Swaminathan

Ketharaman Swaminathan Founder and CEO at GTM360 Marketing Solutions

Yet another neobank claiming innovation with plastic card!

A Finextra member 

The use of Payment Account Reference being introduced by the major card schemes will enable virtual card numbers to be linked to a single account and enable refunds.

A Finextra member 

cahoot a subsiduary of Abbey National now Santander had a unique card number and / or user set limit at least 15 years ago in the UK.  It was also quite app like running in a plug-in.  They removed it in 2009 stating low usage:

"We have made the decision to remove the cahoot Webcard facility for a number or reasons.

We have found that this facility is only regularly used by a small percentage of our customer base and as such believe that the resources currently dedicated to running it could be better utilised elsewhere.

In addition to this there are several commonly-used retailers with whom it is not compatible, which can often mean that customers have to process these transactions using their original card number.

Please note that we are looking to provide a more efficient alternative for this facility in the future. Although we do not have a set date for this as yet, we would notify you before its launch."

A Finextra member 

I'm not sure rolling subscription services with a 'free' trial period are going to like this development.

A Finextra member 

Feel like a great development - one that all the banks must move towards. Need of the hour to combat rising rate of card number theft that can be put to bay now with simple innovative solutions like this one.

A Finextra member 

At Swedbank we started to issue disposable, one time card numbers for e-comm twenty years ago. Good for fraud protection slnce once used the card no was blocked for new payments. For services where you pick upthe purchase like theatre tickets it did not work since the ticket booth wanted to see the card used before handing out tickets... same with airline travel. Great for subscription services since you could control additional payment and renewal. Ir swcurity to eork the issuer needs to block all pan key entry payments with the underlying card. Now we gear up to use SRC to meet the Psd2 security requirements with strong two factor authentication.

A Finextra member 

Seeing the card is for proof of ID - it shouldn't have to be the exact card used.

After making a UK rail booking for tickets on departure I didn't have the card used but was able to collect tickets from the machine using a different card.  I wasn't sure it was going to work though.

A Finextra member 

Taking the example above of having to use the card to collect your tickets, it'll only take one failure and the card will be binned by the customer. Customers, correctly in my view, are right to demand extra security, but not at the expense of convenience and reliability. 

Ketharaman Swaminathan

Ketharaman Swaminathan Founder and CEO at GTM360 Marketing Solutions

Banks in India launched virtual cards around 10 years ago. Of late, I don't see this product. The way it worked, customer had to log in to bank's NetBanking portal first, generate a virtual card #, then visit the merchant's website and enter it. I guess the additional step - that too prior step - of visiting the bank's website introduced too much friction for customers to tolerate. I feel a slight change in the workflow might help: Customer visits merchant's website, where they click a button, which takes them to the bank website to get the virtual card # and then automatically come back to merchant website might improve usage of this product. Making bank website as the first website when a customer's intention is to shop on merchant website is a NO GO, IMO.

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