The Times Australia
The Times World News

.
The Times Real Estate

.

Mastercard plans to get rid of credit card numbers. We could be heading towards the end of cards

  • Written by Gary Mortimer, Professor of Marketing and Consumer Behaviour, Queensland University of Technology

Mastercard has announced plans[1] to remove the 16-digit number from their credit and debit cards by 2030 in a move designed to stamp out identity theft and fraudulent use of cards.

The numbers currently used to identify cards will be replaced with tokenisation and biometric authentication[2][3]

In 2022, Mastercard added biometric options enabling payments to be made with a smile or wave of the hand[4].

Tokenisation converts the 16-digit card number[5] into a different number – or token – stored on your device, so card information is never shared when you tap your card or phone or make payments online.

The first rollout of these numberless cards will be through a partnership with AMP Bank[6], but it is expected other banks will follow in the coming 12 months.

Why card security is important

There is nothing quite like the sinking feeling after receiving a call or text from your bank asking about the legitimacy of a card transaction.

In 2023-2024 the total value of card fraud in Australia was A$868 million[7], up from $677.5 million[8] the previous financial year.

Credit card numbers and payment details are often exposed in major data breaches affecting large and small businesses.

A man sitting at a laptop hold a phone in one hand and a credit card in the other
The cost of credit card fraud in Australia rose by almost $200 million last financial year. CC7/Shutterstock[9]

Late last year, the US Federal Trade Commission took action against the Marriott and Starwood Hotels[10] for lax data security. More than 300 million customers worldwide were affected.

Event ticketing company Ticketmaster[11] was also hacked last year. The details of several hundred million customers, including names, addresses, credit card numbers, phone numbers and payment details were illegally accessed.

So-called “card-not-present fraud[12]”, where an offender processes an unauthorised transaction without having the card in their physical possession, accounts for 92% of all card fraud[13] in Australia. This rose 29%[14] in the last financial year.

The Card Verification Value[15] (CVV) (or three-digit number on the back of a credit card) aimed to ensure the person making the transaction had the physical card in their hands. But it is clearly ineffective.

Benefits of removing credit card numbers

Removing the credit card number is the latest attempt to curb fraud. Removing numbers stops fraudsters processing unauthorised card-not-present transactions.

It also reduces the potential for financial damage of victims exposed in data breaches, if organisations are no longer able to store these payment details.

Man walking between large computer servers
Companies will no longer be able to store card data, reducing the risk of data breaches. ESBProfessional/Shutterstock[16]

The storage of personal information is a contested issue. For example, the 2022 Optus[17] data breach exposed information from customers who had previously held accounts with the telco back in 2018.

Removing the ability of organisations to store payment details in the first place, removes the risk of this information being exposed in any future attack.

While any efforts to reduce fraud are welcome, this new approach raises some new issues to consider.

Potential problems with the new system

Mastercard has said[18] customers will use tokens generated by the customer’s banking app or biometric authentication instead of card numbers.

This is likely to be an easy transition for customers who use mobile banking.

However, the use of digital banking is not universal. Many senior consumers[19] and those with a disability [20]don’t use digital banking services. They would be excluded from the new protections.

While strengthening the security attached to credit cards, removing numbers shifts the vulnerability to mobile phones and telecommunication providers.

Offenders already access victims’ phones through mobile porting[21] and impersonation scams[22]. These attacks are likely to escalate as new ways to exploit potential vulnerabilities are found.

There are also concerns about biometrics. Unlike credit card details, which can be replaced when exposed in a data breach, biometrics are fixed. Shifting a focus to biometrics will increase the attractiveness of this data, and potentially opens victims up to ongoing, irreversible damage.

While not as common, breaches of biometric data do occur.

For example, web-based security platform BioStar 2[23] in the UK exposed the fingerprints and facial recognition details of over one million people. Closer to home, IT provider to entertainment companies Outabox[24] is alleged to have exposed facial recognition data of more than one million Australians.

Will we really need cards in the future?

While removing the numbers may reduce credit card fraud, emerging smart retail technologies may remove the need for cards all together.

Smartphone payments are already becoming the norm, removing the need for physical cards. GlobalData[25] revealed a 58% growth in mobile wallet payments in Australia in 2023, to $146.9 billion. In October 2024, 44% of payments were “device-present[26]” transactions.

Amazon’s innovative “Just-Walk-Out[27]” technology has also removed the need for consumers to bring a physical credit or debit card all together.

Amazon Go and the world’s most advanced shopping technology.

This technology is available at more than 70 Amazon-owned stores, and at more than 85 third-party locations across the US, UK, and Australia. These include sports stadiums[28], airports, grocery stores, convenience stores[29] and college campuses.

The technology[30] uses cameras, weight sensors and a combination of advanced AI technologies to enable shoppers in physical stores make purchases without having to swipe or tap their cards at the checkout line.

Such technology is now being offered by a variety of other vendors including Trigo[31], Cognizant[32] and Grabango[33]. It is also being trialled across other international retailers, including supermarket chains Tesco and ALDI.

While Just-Walk-Out removes the need to carry a physical card, at some point consumers still need to enter their cards details into an app. So, to avoid cards and numbers completely, smart retail tech providers are moving to biometric alternatives, like facial recognition payments[34].

Read more: Paying with your face: what will convince consumers to use facial recognition payment technology?[35]

Considering the speed at which smart retail and payment technology is entering the marketplace, it is likely physical credit cards, numberless or not, will soon become redundant, replaced by biometric payment options.

References

  1. ^ plans (www.smh.com.au)
  2. ^ tokenisation (www.mastercard.com.au)
  3. ^ biometric authentication (www.payset.io)
  4. ^ smile or wave of the hand (www.mastercard.com)
  5. ^ converts the 16-digit card number (www.mastercard.com)
  6. ^ AMP Bank (corporate.amp.com.au)
  7. ^ A$868 million (www.auspaynet.com.au)
  8. ^ $677.5 million (www.auspaynet.com.au)
  9. ^ CC7/Shutterstock (www.shutterstock.com)
  10. ^ Marriott and Starwood Hotels (www.ftc.gov)
  11. ^ Ticketmaster (www.abc.net.au)
  12. ^ card-not-present fraud (www.europol.europa.eu)
  13. ^ 92% of all card fraud (www.auspaynet.com.au)
  14. ^ rose 29% (www.auspaynet.com.au)
  15. ^ Card Verification Value (www.canstar.com.au)
  16. ^ ESBProfessional/Shutterstock (www.shutterstock.com)
  17. ^ 2022 Optus (www.abc.net.au)
  18. ^ has said (www.smh.com.au)
  19. ^ senior consumers (nationalseniors.com.au)
  20. ^ disability (www.a11y-collective.com)
  21. ^ mobile porting (www.idcare.org)
  22. ^ impersonation scams (www.scamwatch.gov.au)
  23. ^ BioStar 2 (www.theguardian.com)
  24. ^ Outabox (www.wired.com)
  25. ^ GlobalData (www.globaldata.com)
  26. ^ device-present (www.rba.gov.au)
  27. ^ Just-Walk-Out (aws.amazon.com)
  28. ^ sports stadiums (www.mcg.org.au)
  29. ^ convenience stores (www.thenewdaily.com.au)
  30. ^ technology (www.aboutamazon.com)
  31. ^ Trigo (www.trigoretail.com)
  32. ^ Cognizant (www.cognizant.com)
  33. ^ Grabango (www.grabango.com)
  34. ^ facial recognition payments (www.finextra.com)
  35. ^ Paying with your face: what will convince consumers to use facial recognition payment technology? (theconversation.com)

Read more https://theconversation.com/mastercard-plans-to-get-rid-of-credit-card-numbers-we-could-be-heading-towards-the-end-of-cards-248545

The Times Features

Gastric Balloon Surgery: A Minimally Invasive Solution to Weight Loss

A gastric balloon is a soft silicone device placed in your stomach to reduce its space, helping you feel full with smaller meals. The balloon can be inserted through your mouth ...

How to Find Affordable and Quality Sheet Sets on a Budget

Finding the perfect balance between affordability and quality when shopping for sheet sets can be quite the challenge, especially if you're sticking to a budget. The right sheet se...

What’s the difference between wholemeal and wholegrain bread? Not a whole lot

If you head to the shops to buy bread, you’ll face a variety of different options. But it can be hard to work out the difference between all the types on sale. For instance...

Expert Tips for Planning Home Electrical Upgrades in Australia

Home electrical systems in Australia are quite intricate and require careful handling. Safety and efficiency determine the functionality of these systems, and it's critical to ...

Floor Tiling: Choosing the Right Tiles for Every Room

Choosing floor tiles is more than just grabbing the first design that catches your eye at the showroom. You need to think about how the floor tiling option will fit into your spa...

Exploring Family Caravans: Your Ultimate Guide to Mobile Living and Travel

Australia is the land of vast horizons, spectacular coastlines, and a never-ending adventure. As landscapes and adventures vary across the country, Voyager will route you, carava...

Times Magazine

The Power of Digital Signage in Modern Marketing

In a fast-paced digital world, businesses must find innovative ways to capture consumer attention. Digital signage has emerged as a powerful solution, offering dynamic and engaging content that attracts and retains customers. From retail stores to ...

Why Cloud Computing Is the Future of IT Infrastructure for Enterprises

Globally, cloud computing is changing the way business organizations manage their IT infrastructure. It offers cheap, flexible and scalable solutions. Cloud technologies are applied in organizations to facilitate procedures and optimize operation...

First Nations Writers Festival

The First Nations Writers Festival (FNWF) is back for its highly anticipated 2025 edition, continuing its mission to celebrate the voices, cultures and traditions of First Nations communities through literature, art and storytelling. Set to take ...

Improving Website Performance with a Cloud VPS

Websites represent the new mantra of success. One slow website may make escape for visitors along with income too. Therefore it's an extra offer to businesses seeking better performance with more scalability and, thus represents an added attracti...

Why You Should Choose Digital Printing for Your Next Project

In the rapidly evolving world of print media, digital printing has emerged as a cornerstone technology that revolutionises how businesses and creative professionals produce printed materials. Offering unparalleled flexibility, speed, and quality, d...

What to Look for When Booking an Event Space in Melbourne

Define your event needs early to streamline venue selection and ensure a good fit. Choose a well-located, accessible venue with good transport links and parking. Check for key amenities such as catering, AV equipment, and flexible seating. Pla...

LayBy Shopping