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FNB wants you to ditch your physical cards

And why new virtual credit/debit cards are more secure….
Image: Shutterstock

FNB will roll out virtual card functionality to its entire customer base across credit cards, debit cards, fusion cards and business debit cards by October – before the peak annual shopping season, which starts with Black Friday in November.

An internal pilot has been followed by a launch to all FirstRand staff on Tuesday. The bank will be among the first to roll out these virtual Visa cards to clients in South Africa, but a number of other banks and fintech startups globally already issue digital cards.

FNB customers can create as many of these virtual cards in the FNB app as they like. These cards, linked to their existing accounts, do not attract any additional charges. Customers will be able to block, cancel or replace cards from within the app.

There are some significant security benefits to virtual cards, chief among these that they have a dynamic CVV (card verification value) number that changes every hour. Senzo Nsibande, Head of Card Fraud at FNB says an obvious additional advantage is that the card is stored behind log-in on the FNB app. Because of the added security, the expiry date of the virtual card is also longer (five years, versus three for physical cards).

Virtual card e-commerce transactions will be approved in the app itself. This avoids potential problems during high-volume periods with delayed one-time PINs. All banks are highly reliant on the mobile operators for these messages, and FNB believes Smart inContact is a more elegant solution over which it has control.

Additionally, an enhanced risk-based authentication system will build out a digital profile of customers, including the devices used. This means, says Nsibande, that the bank may decide not to challenge the kind of transaction (think an Apple Music or Netflix subscription) that happens at the same time/same value each month. Those outside of “normal behaviour” would need to be approved.

A further benefit of the virtual cards is that instead of needing to cancel a customer’s full physical card after a fraud event, the two worlds are “divorced”, and a new virtual card can be issued without worrying about the physical card (which typically takes around three days to be delivered). “This elevates the convenience factor tenfold,” says Nsibande. Customers could, for example, create a virtual card for all their online purchases and another for in-store transactions.

The bank has already enabled ‘Scan to Pay’ functionality with its FNB Pay product within the banking app. This allows customers to scan a QR code to complete a transaction in a retail environment and is interoperable with merchants who use Snapscan and Zapper. It says all three million of its app users will be able to use this seamlessly with their virtual cards. Android, Garmin or Fitbit users will be able to continue to use tap to pay with their virtual cards.

The Covid-19 pandemic has accelerated the adoption by merchants of tap to pay and scan to pay functionality. Even the large supermarket chains have enabled payment via scanning a QR code on their point-of-sale card terminals to avoid the need for customers to touch these while inputting their PIN. With this fundamental shift in the market, in most retail scenarios, customers will not have to have their physical bank card with them for a transaction.

Transacting with virtual cards while overseas will be possible (when travel eventually resumes), but using scan to pay, for example, would require a data connection. In these cases, the physical card may yet still trump the virtual.

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Im glad I ditched FNB!

… Standard Bank is way ahead and already has this feature.

My phone does not have data while overseas, so that is the end of that matter. I guess I should apply for another banks cards then in case FNB decide that physical cards will no longer be replaced.

And therein lies the solution. Standard Bank allows you to use their banking app even if you have no airtime. So a similar approach is required with international networks whereby you will not be paying for roaming charges if you only do banking transactions. And as all is cloud based, it makes no difference if your phone gets stolen. Many ways to solve this.

I think FNB makes the assumption they are a persons only “APP” I use 6 different banks in 3 different countries. Then some other goodies all with passwords and pin’s etc.

When so many you might end up having to get your devise to remember some of these things.

There goes your security just to enable them to make more money.

Time for crypto’s are getting closer and closer.

And if your phone is stolen….

You can’t even swipe to purchase the new phone…

In the past six years I have been the unfortunate owner of five smartphones (Samsung x2, Nokia, Huawei and Blackberry). All have failed for varying reasons after a few months, and I’ve now resorted to using my 10-year old Nokia feature phone – I’ve had enough of the lousy engineering in smartphones. So now I have a phone that works extremely well as a phone, but knows as much about apps as my grandmother does. So what am I suppose to do now, FNB? Perhaps you should issue your long-time clients with FNB smart phones to replace the bank cards you intend to phase out. Sounds like a fair exchange to me…

This is ancient technology.

Lets have some detail on how it works?

Do you need data or airtime? Many have no cell phone contracts because the data and airtime just melts away. what do they do?

There was the ‘tap’, which has become the default setting for cards yet banks do not let this feature work on ATM’s (Merchants and Clients alone carry the risk). Now this! What next – a chip implanted in your forehead?

Banks PR and their BS!!! They don’t do this for customers or Merchants – it is ONLY for their own cost cutting benefit and to hell with the risk that moves over to others. So, where is the Banking Ombud in all of this? Silent and supportive of the Banks as usual.

By the time I saved up enough money to buy a walkman, it was replaced by the ipod. I never owned an ipod either. By the time I understand this technology, it will already have been replaced by something new. So I just use cash.

The bank is not there to help or assist you the client in any way whatsoever..
They are first and foremost a parasitic things sucking their own customers dry as much as they can get away with.
Every new technology they bring out is only to enhance their own profit and it is always promoted as better security and conveneinece for the customer – never will they admit it is to remove the risk from them and to enhance their obscene profits.

Even more control and data (which they can sell to retail) at their disposal, GPS tracking will enable banks to know within a 1 meter accuracy where you are spending your money.

Wow, I didn’t expect to see such a flood of negativity after I read this article. Well done to FNB for implementing a more secure credit card feature for their clients. Whether other banks have already implemented it is irrelevant. In this day and age there are few that do not own a smartphone, you are hard pressed to find a phone that isn’t. As to not having data, these banking apps use so little data that it is insignificant. I believe data fees have not been charged by mobile operators for the FNB mobile app since 2017. Additionally, if you have and use Facebook, Instagram, Youtube, email etc on your phone , you have no right to complain about a banking app’s data use anyway. As to losing your phone etc.. well same re losing a physical card but more secure. Banking apps are securely authenticated and if you don’t have a phone/SIM pin or password setup then you don’t belong on the internet.

Missing a point. This tech is made with sight on customers having entrance to money with no end in supply. IMF money is streaming this way, and have to roll, one way or another. Watch news as the best explain to Zondo, how they do, did it. Not by stealing, but entitlement, kind of.

Anything the banks do is for their own benefit not yours. You been brought up to believe debt is bad and something you should avoid, so the banks renamed debt credit and marketed credit as something good which you should try to get more of. A credit card should be called a debt card it’s correct name. Live on cash, in that way you can see that you are actually spending real money and budget better.
Wealth= spending less than you earn and investing the difference. If people stopped smoking and drinking they would have some money to save. Billions are blown in South Africa every year on alcohol.

Agree, Rich=spend it. End up poor.

Wealth as you say is spend whats needed and save/grow/invest/feed your brain the rest.

@Vanatx, as you are obviously a fan of the innovation can you you answer two questions. 1. Have you read the terms and conditions that you must agree to when you use this app and do you understand who carries the risk of losses through the fraudulent use of this app? The bank or the user?

Hi Stormrider, as with any banking app, the terms are similar in that security and software is a “best effort” by the bank using industry best practice and it is expected that the user complies with all recommended security practices such as safeguarding PINS/passwords to the app as well as device and using security software on their device etc. The same applies to all online banking.This particular innovation (virtual cards) is simply a more secure option that is now available to FNB clients.

End of comments.

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