Digit-Free Cards: The Latest Move to Combat Identity Fraud in Banking
Goodbye, physical credit and debit card numbers! Mastercard is going digit-free and will completely phase out card numbers by 2030, replacing them with tokenization and biometric authentication.
The intention behind this move? To make online transactions smoother and safer and to eliminate fraud and identity theft.
What is tokenization?
When talking about data security, tokenization is the process by which sensitive data —such as a debit or credit card number or personal identification information (PII)— is replaced with a unique identifier, which is called a token.
This token represents the original data but has no intrinsic value or meaning, making it useless if intercepted by malicious actors. Meanwhile, the sensitive data is stored securely in a separate location, often a tokenization vault.
While digital payment solutions have become more sophisticated over the years, so have the criminal tactics that target them. According to Mastercard’s research, fraud rates are seven times higher online than in stores. Tokenization helps reduce the risk of data breaches because if someone gains access to the tokens, they cannot retrieve the sensitive information, and thus it remains protected.
By replacing card numbers with tokenization, card information will no longer be shared when cardholders tap their card or phone or make payments online. Of course, it also reduces the risk of fraud should a card be lost or stolen, as the card information will no longer be displayed on the card.
What is biometric authentication?
Biometric authentication verifies identity through an individual’s biometric traits, such as unique physical or behavioral characteristics. Some examples include fingerprint recognition, facial recognition, and voice recognition.
Instead of relying on passwords or one-time codes to verify the cardholder’s identity —which can be easily stolen—, Mastercard will use on-device biometrics to authenticate identity across devices and websites, ensuring personal data stays on the device. Discover how biometrics elevate the user experience.
Sweden, Norway, the UK, the USA, and Germany are just five of the countries where physical numberless cards are already becoming popular, with users drawn to options that enhance security and increase privacy. Will physical numberless cards become the default?
Quicker payments & higher conversion rates
Aside from security concerns, manual data entry also has a negative impact on the user experience according to Mastercard’s research: nearly two-thirds of shoppers still struggle to enter their card details manually, with 25% of carts being abandoned due to a slow or complicated checkout process. Read more about the importance of speed in identity verification.
By switching to tokenization and biometric authentication, banks tend to experience an increase in user satisfaction and higher conversion rates.
How Incode strengthens identity verification
As more and more systems and services move online, cyber criminals have more opportunities to exploit vulnerabilities. At the same time, GenAI technology is becoming increasingly easier to access, meaning that more fraud tactics are constantly becoming more sophisticated.
Incode uses facial recognition, liveness detection, document verification, and purpose-built OCR technology to block 99.65% of GenAI fraud. We ensure that the person requesting access to your service or system is exactly who they say they are.
Our Facial Recognition technology uses advanced ML models trained on globally inclusive data to compare selfies with ID photos or previously captured selfies stored in the database, and delivers less than 0.01% false matches.
Our Liveness technology analyzes micro-expressions, lighting, and motion patterns, capturing the subtle cues that distinguish real users in front of the camera from sophisticated deepfakes.
Our Document Verification technology verifies IDs using ML models trained to capture, classify, and process data from over 4900 global identity documents. It detects both physical fake IDs and AI-generated forgeries.
Read more about our technology.