Your New Visa Card? You're Yelling Into It
Visa helps a lot of people buy a lot of stuff: $1 trillion dollars annually. They're currently testing a payment system, along with Wells Fargo Bank, that allows its customers to make payments using their mobile phones. Such payment methods are already common in Japan and South Korea.
Using "account-level processing," Visa's payment-processing system now manages transactions in real time using the entire 16-digit credit card number, rather than the six-digit bank identification number that had been used. The change lets consumers carry their account numbers with them if they move to more exclusive cards, and lets merchants offer new services and benefits, such as on-the-spot discounts. "This allows us to take a specific action in real time based on consumer behavior at a specific merchant and a specific location," says Jim McCarthy, head of consumer products for Visa USA.
The system is more secure than it first appears, as financial data would no longer be transmitted to complete such a transaction. Your device instructs Visa to transfer money to the vendor through a Short Message Service message, and Visa can remotely disable the device if it is lost or stolen. You currently hand your card to anybody wearing a waitress outfit, who then wander off with it for ten minutes; how much more unsecure can you get?