Inherent Fraud Protection

Last month, convicted TJX hacker Albert Gonzalez, the world’s largest credit card hacker, was sentenced to 20 years in prison. His breaches involved the first known decryptions of PIN codes, “the holy grail of bankcard security”, according to Wired. The song is nothing new: As criminals become more devious, law enforcement and security work to get ahead of the curve.

Purchasing controls such as PIN codes and maximum per transaction limits are used to minimize the risk of fraud for universally-accepted credit cards and private label (or closed loop) payment cards alike. But by their very nature, private label payment cards are inherently more secure than universal credit cards. Private label cards can only be used within a single network of merchants. For instance, a Super Mart private label card, say, would be accepted only at Super Mart-branded stores, making the cards inherently less appealing to fraudsters.

And private label cards don’t have to rely on an infrastructure shared by millions. As a result, purchasing controls can be customized to address the needs of a particular merchant network and industry, like requiring purchase order numbers that match individual customer PO format rules, restricting purchases to specific goods and services, or even requiring industry-specific information to ensure the validity of a transaction.