Benefits of Digital Cards

Paying with a credit card image: unsplash.com

For nearly three decades, Jerome Arthur Uffner has served as an executive in the payment processing industry. Jerome Uffner is currently a senior vice president of prepaid at FIS, a company involved in emerging payment options such as digital cards.

Digital cards provide benefits to consumers and companies. Differing from traditional cards, digital cards enable customers to use them quickly. They also save card providers from the hassle of having to create and mail physical cards to customers, saving both time and money.

Another potential benefit is safety. With some credit providers, consumers can create a virtual card with different numbers than their primary account number. In the case of a data breach that compromises the virtual card, the cardholder can close the virtual card to manage associated risks without having to close their main account. This capability can also reduce the risk of fraud for credit providers.

Customization also distinguishes digital from traditional cards. For example, virtual cards may be set up for a single use or unique subscription. They can have smaller spending limits or near-term expiration dates. This flexibility makes it possible for card providers and users to make choices that best suit their needs.

Card Issuers Should Adopt Machine Learning Tools to Prevent Fraud

An alumnus of the University of Pittsburgh, Jerome Arthur Uffner previously served as president and CEO of FirstView Financial. Currently the senior vice president of prepaid at FIS Global, Jerome Uffner encourages card issuers to use machine learning to prevent fraud.

Attacks on card data, prepaid or otherwise, compromise users’ finances and affect their trust in financial institutions. When card issuers detected a breach of user accounts, they walk a fine line between telling card holders or taking remedial action. Neither choice is easy. If they tell the cardholder, he or she will update relevant security information but they risk losing the customer’s trust. If they attempt remedial action, they’ll have to predict which breached cards will eventually be used to commit fraud (a difficult undertaking, given that only 5 percent of breached cards are ever used for fraud) or take the safe road and reissue all affected cards, a thorough but very expensive option. Thankfully, a new technology, machine learning, is giving card issuers versatility in preventing and dealing with fraud.

Machine learning can help issuers detect breaches, identify affected cards, and block fraudulent transactions in real time. This decreases the time it takes issuers to inform cardholders of breaches and to automate capital and labor-intensive processes involved in reissuance. In addition, machine learning can quantify issuers’ exposure to future fraud on certain issued cards, allowing them to take appropriate action months ahead of time. In this way they stay on top of things, pre-empting breaches rather than reacting to them.