Simplest and most effective way to stop credit card fraud dead in its tracks would be to…
Make every Credit/Debit Card Holder buy a cheap ($9.95) security dongle that issues a 6 digit number – Corporations use these to secure their networks and this works !!! Security dongle make a Bluetooth connection with your Credit/Debit card (obviously must be some kind of smart card…) which means any time your security dongle is not within 30 feet of your Credit/Debit Card your bank cancels your card for you automatically along with your security dongle and they reissue both as a paired set. This allows the Security Dongle to automatically issue the 6 digit number for you when making a purchase at a merchant (gotta make sure the data is encrypted however – banks really suck at using encryption for this purpose…).
Every time you want to use your Credit/Debit Card you have to press a button on your security dongle to get a new 6 digit code that you enter when making a purchase.
Even if someone does manage to get your credit card number and zip code they won’t have your security dongle unless they steal it from you.
Done – no more credit card fraud !!!
Very little cost to banks other than development of a smart card and Bluetooth security dongle. Banks could even use your Android of iOS smart phones in-place of a smart credit/debit card but then this has always been an option for the last 3-4 years.
Why banks don’t go this route is the amazingly stupid thing in my humble mind but then I am just the boob whose credit/debit card was recently hijacked which I don’t mind saying is what got me thinking about this problem in the first place. I really seriously doubt anyone would ever both trying to hijack anyone’s credit/debit cards once this level of security was in-place and widely used.
Dual-Key or Public-Private key security has been around for many years. It would not be difficult to create a very secure system at very little cost using Android/iOS Smart Phones with the ability for the customer to recreate a new Key-pair before or after each purchase in a safe and secure manner such that credit/debit card fraud could be eliminated completely.
Oh yeah, if Smart Phones could be used in-place of credit/debit cards I as a customer would be able to limit who can use my card to only those who fall within a very small geographic area simply by geotagging purchases, but again this just makes perfect sense.
Just my 2 cents now that I have to visit my local banking branch just to get the ability to use my own money now that my credit/debit card was cancelled and is in the process of being replaced for me simply because my stupid bank was too lazy or too stupid to figure-out how to ensure my money is as safe as it would be were it sitting in my own mattress at home.
P.S. You all can thank me later when your credit/debit cards can also never be hijacked again !!!