First Data Corp. is using dual-interface contactless card chips from Inside Contactless in a pilot test for a debit card fraud-protection product.
The chip generates one-time numbers, which replace authentic card account information to complete a portion of transactions. First Data's Star electronic funds network introduced a product last month that uses a contactless chip in this way for point of sale transactions. Star reverts the one-time number back to the actual card number at its switch before sending the transaction to the issuer for authorization.
The technology is Star's answer to the EMV Integrated Circuit Card Specification, which has gained little support in the United States despite its use worldwide.
The Interac Association, which operates Canada's sole PIN-debit network, also uses the Inside Contactless chip to add a contactless payment function to its EMV cards. People would be able to use the Interac contactless function, called Flash, for purchases of less than $50 without the need to enter a PIN.
Inside Contactless announced its work with First Data, which is owned by the private-equity firm Kohlberg Kravis Roberts & Co., on Sept. 28.
