This week, Infineon Technologies introduced two new secure prepaid tag solutions. Infineon’s secured EMV prepaid tag solution focuses on open-loop gift cards, while the secured prepaid tag solution is offered for closed-loop gift cards.
The new additions address the challenges associated with traditional gift cards by replacing the need for visible codes, barcodes, or magnetic stripes with a secured chip using cryptographic mechanisms. This chip can be accessed using NFC devices by using a consumer’s phone authenticated with the necessary data, allowing both retailers and consumers to tap the gift card for activation, check the balance, and redeem assets.
According to information compiled by the FTC, roughly 25% of all fraud reports are related to gift card fraud, and 34% of US adults said that they or someone they know has already been targeted by gift card scams. This is bad for consumers but even worse for merchants as the operational overhead to identify, manage and resolve gift card fraud ultimately generates merchant costs of four dollars on every dollar lost to gift card fraud.
Infineon’s secured EMV prepaid tag solutions aim to mitigate these fraud issues for open-loop gift cards by enabling a simple tap-and-pay approach at any POS merchant device or at any retail outlet processed via payment networks. Secured prepaid tag solutions are intended to be used for closed-loop gift cards, which are processed in retailer-specific or closed-loop environments.
“Gift card scams include sales of expired cards previously tampered with by bad actors, theft by fraudsters who trick consumers into revealing gift card ID information and sophisticated social engineering techniques used to trick consumers into ‘buying’ cards and revealing the data needed to use them,” said Tolgahan Yildiz, head of the Trusted Mobile Connectivity and Transactions Product Line, Infineon Technologies AG. “Our secured prepaid tag solutions make this kind of theft and asset drainage ineffective by securing all usable information on a well-protected chip, accessible only to issuers, retailers and the valid holders of the gift cards.”
Infineon’s first ecosystem partner in the gift card industry is Karta Gift Card, a provider of secured access and processing capabilities of prepaid gift cards issued by retailers. For both Infineon’s secured prepaid tag solutions, Karta provides support for AES encryption protocols and processing capabilities.
Karta’s technology offers cryptographic validation with every tap for adoption by gift card retailers. With the combination of Infineon and Karta technologies, every gift card transaction will be enhanced with secured dynamic NFC tags and state-of-the-art cryptographic intelligence to avoid gift card cloning, skimming and replay attacks.
“By combining Karta’s real-time cryptographic validation technology with Infineon‘s advanced secure NFC chip solutions, we’re setting a new benchmark for prepaid gift card security. Leveraging AES-based encryption and dynamic authentication with every tap, this collaboration delivers end-to-end protection against gift card draining and scams,” said David Anderson, co-founder and co-CEO of Karta Gift Cards.
