Secondary credit card security systems for online transactions such as Verified by Visa are all about shifting blame rather then curtailing fraud, Cambridge University security researchers argue.
The 3D Secure system - branded as either Verified by Visa or MasterCard SecureCode - has become a ubiquitous extra line of security for many online transactions, with over 200 million cardholders registered. The number of merchants who insist that users submit an additional password and re-submit a CVV code in order to authorise a transaction makes it hard to shop online without using the technology.
Cambridge researchers Professor Ross Anderson and Steven Murdoch ran a rule over 3D Secure and found it badly engineered in comparison with alternative schemes such as OpenID and InfoCard. Worse still, the scheme has become a target for phishing, partly because inconsistent authentication methods can leave customers confused.
An additional problem is that Verified by Visa passwords can be reset simply by knowing a cardholder's card details and date of birth, and DOBs are readily available on the public record (in the UK at least).
3D Secure's success in the marketplace is explained by the "strong incentives for adoption" set up by the scheme.
"Merchants who use it push liability for fraud back to banks, who in turn push it on to cardholders," Anderson and Murdoch argue.
"Properly designed single sign-on systems, like OpenID and InfoCard, can’t offer anything like this. So this is yet another case where security economics trumps security engineering, but in a predatory way that leaves cardholders less secure."
The Cambridge researchers are calling on bank regulators to step in and improve the scheme, suggesting a number of approaches to improve security and reduce fraud in a paper submitted to the Financial Cryptography conference in Tenerife, Canary Islands, Spain. ®