European banks have been leading the way for 5 years in adopting numberless debit cards, and now an Australian bank is following suit with others expected to join.
AMP has become the first bank in Australia to announce the introduction of numberless debit cards for its customers in collaboration with Mastercard, with more banks expected to follow suit.
Mastercard has revealed its plans to phase out the traditional 16-digit number on physical credit and debit cards by 2030, opting for tokenization and biometric authentication instead.
This change aims to reduce fraud and enhance consumer security by minimizing exposure to large-scale data breaches.
For online purchases, Mastercard is planning to eliminate manual card and password entry by the end of the decade, replacing it with facial recognition and fingerprints, making secure on-device biometrics mandatory for users.
Head of security solutions at Mastercard, Johan Gerber, stated that Australia contributes about a quarter of all globally detected fraud by Mastercard, with fraud rates being seven times higher online than in physical stores.
More Sales For Online Retailers
In addition to the security improvements, Mastercard highlights that the technology will also help reduce or eliminate the 25% of abandoned online shopping carts due to the difficulty of manually entering card details.
Mastercard reports that the implementation of tokenization has already reduced cart abandonment and increased transaction approvals by three to six percentage points, resulting in up to $3.2 billion ($2 billion) in additional monthly sales for merchants.
Top executives from Mastercard recently visited Melbourne to meet with Australian bank and merchant partners to discuss the company’s product roadmap for the next five years.
AMP Bank will start issuing numberless debit cards from February as part of its new mobile-first digital bank, which has entered into a strategic partnership with Mastercard.
Customers will be encouraged to use face and fingerprint ID to access the app, and they will also be required to record a video selfie during the initial sign-up process to help prevent identity theft, according to the bank.
The AMP app is based on “Engine by Starling,” the technology that enabled UK’s Starling Bank to become the first profitable digital bank in the country. Since its launch in 2017, Starling Bank has amassed over 4.5 million customer accounts.
European banks have been using numberless cards for approximately five years.
In more than 70 markets—excluding the United States and Australia—Mastercard offers a physical card with a built-in thumbprint scanner. This feature can be set up in just five minutes and can be done at home using a disposable device.
What Are Tokens?
A digital authentication token is an encrypted piece of unique data that serves as a temporary “ticket” to verify a user’s identity when accessing a system or app, enabling them to log in without repeatedly entering a password.
Essentially, after users authenticate themselves with their credentials, the system generates a token, which is then used to confirm their identity for subsequent requests within a specific timeframe.
A token typically comprises three parts: a header (identifying token type and signing algorithm), a payload (containing user information), and a signature (used to validate the token’s authenticity).
When a user attempts to access a protected resource, they send the token with their request. The system verifies the token’s validity by checking the signature and ensuring it hasn’t expired.
