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CVV Codes Find New Life in M2 Anti-Fraud Solution 

June 25, 2012

M2 Systems, a Maitland, Fla.-based payments processor, late last week launched a new anti-fraud technology for card-not-present merchants that leverages and builds on an old tactic. The company’s SAFE Technology uses the CVV code on the back of all credit and debit cards to generate unique, one-time security codes for transactions made online or via telephone.  Cardholders request a unique dynamic CVV code via a mobile app on an iPhone or Android device, or by text message. Users enter the new one-time-use CVV code, which is issued and available only for a single transaction, when prompted for the CVV at checkout.

“Until now, cardholders have not had the ability to personally control and immediately prevent fraud, and card issuers have lacked a proven solution to stem the tide of heavy losses they must absorb,” says Mike Muscato, chairman of M2 Systems. “This clearly puts the fraud controls in the hands of the consumer.”

At a panel session during the recent CNP Expo, several experts debated the limitations of traditional CVV codes as an anti-fraud tactic (read a summary of the session and hear an audio clip of panelists discussing CVV codes). Generating a one-time CVV code could address those limitations.

 Muscato says the solution also lets cardholders restrict the type of transactions a card can be authorized for both in CNP and POS transactions, rendering the card temporarily or permanently unable to make purchases of certain categories of products.

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