VISA Uses Code To Expose Phony Cards

VISA now has a fraud detection capability built into the credit card's magnetic strip. It will allow issuers to identify at once transactions made with counterfeit cards.

A three digit code has been added to the account number, but is hidden in the strip. When the credit card is swiped at a point-of-sale terminal, the data on the magnetic strip is transmitted to a processor, which forwards the information to VISA for validation. VISA then checks the code against one revealed by its own system. A card that has been "created" using printed information will not have the code.

VISA expects the new technology to deter counterfeiters who use valid account numbers and expiration dates found on carbons or receipts, as the coded number will not appear anywhere, and is discernible only on the magnetic strip.

Copyright © 1993 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 4, No. 5, 11/93