I had the pleasure of recently talking to David Marsyla, CEO of PocketKey (http://www.pocketkey.com) about their new solution to secure card transactions. PocketKey is an independent attempt to address security issues with card transactions, particularly card-not-present (CNP) transactions such as those related to eCommerce. If any security solution was needed, it is in the CNP space.
While PocketKey seems to provide a very secure method of conducting transactions, during our conversation, I expressed my concerns about their business model.
- We have seen this before. Back around the turn of the century, Visa, MasterCard and American Express all flirted with similar schemes that required their EMV cards to be inserted into a serial device connected to a PC to be used online. Unfortunately, very few Web sites ever supported their application programming interfaces (API) so these solutions disappeared as quickly as they had been rolled out.
- It is not as portable as I would have hoped. PocketKey needs to be plugged into your PC, smartphone or other device that can provide Internet access. If an application on your device supports the PocketKey API, then the application can store the encrypted CHD information from the PocketKey for use in future transactions.
- It requires application changes. In order for PocketKey to work, applications must be modified to handle the PocketKey API to get the full potential out of the solution. This means that PocketKey needs to get application providers on board for their solution to be implemented. In my very humble opinion, the best solution is one that does not require any application changes at the merchant end.
- It requires the cooperation of transaction gateways, processors or banks. Not only do applications need to be addressed, but then card transaction gateways, processors or banks need to support PocketKey to work because the encrypted data generated by PocketKey needs to be converted at some point to actual cardholder data (CHD) for approval.
- EMV provides similar capabilities. EMV cards have the ability to secure transactions through the use of dynamic primary account numbers (PAN), dynamic card verification values (CVV) and other security features. However these capabilities also require changes with applications as well as with transaction gateways, processors or acquiring banks in order to work. Do not be surprised if once the US EMV roll out is completed that, wonder of wonders, Visa and MasterCard then tout these “new” security features and push for their implementation by merchants, gateways, processors and banks.
It is not that these limitations cannot be surmounted so much as they require cooperation within the application and transaction processing communities to make it work. It is nice to see that someone is trying do something to address fraud problems. Card present fraud is almost a thing of the past and will be once magnetic stripes are completely gone (still a long time before this happens). However CNP fraud continues to grow as attackers find it the only way to quickly monetize their illegally obtained CHD.
I wish PocketKey all the best and hope they attract the necessary partnerships to make their business model work.
PCI Guru 