Do you trust your waiter?

By , January 14, 2011 12:55 pm

My sister recently had her credit card stolen (well, she left it somewhere) and the perpetrator was able to charge $1,000 on it before the fraud alert people called her. Many years ago, I had my credit card charged up to the tune of $6,000 before it was stopped. I didn’t lose my card at all, but had the information lifted in a restaurant.

Do you trust your waiter?  Buying stuff online is commonplace now and with all the passwords and encryption available, I don’t think that online buying is much of a risk anymore. The BIGGEST risk by far is when you go out to dinner! Think about what happens when you pay for your dinner.

Trust me?

Do you trust your waiter?

You hand you credit card to someone you met about an hour ago. That person takes your card to a register (sometimes not within your sight line) and runs it through some verification. Now, in order to order stuff online, one one of the security measures is a little 3 or 4 digit code that is on the back of your card by the signature.

When you use a credit card, the cashiers are instructed to turn your card over and check that it’s signed. Yes, you guessed it. The security code is right by your signature. So in a nutshell, they have plenty of time to get all the information they want – out of your view.

The reality is that it’s human nature that will determine whether or not you are a victim of credit card fraud. The systems we use everyday online are very secure, it’s the physical encounters that are full of risk.  I think in the future, there will be ways to pay for things that are ultimately linked to non-physical interactions. Mobile payments is a great example of this.

Mobile Payments – ultimate security?

Our phones have unique IDs in many ways. Whether it’s the serial number of the device or the actual phone number – that’s only the beginning. What if a mobile transaction included things like a fingerprint or a voice print, even a visual verification? Do you think that’s way out there? Not so fast, the technology all exists today.

Mobile phones are just little computers now. They can take great pictures, do voice searches, and some tablets now have fingerprint readers. So imagine a scenario where a questionable transaction would be verified by a biometric exchange. Someone tries to charge a large transaction at a store. The store rings up the bank who sends a sms with a linkcode asking for a voice or visual verification. You snap a picture of yourself and send it back to the bank. The picture contains a location code so the bank can tell that you are actually at the store in question. Furthermore, the face recognition software “sees” that it’s you and sends an approval to the bank. The bank sends an “approved” message to the store and everything is done.

If your phone was stolen, it would be very difficult to compromise this system. OK, so now you know one of my startup ideas. Please don’t steal it!

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