De Sonneville International has filed two US patent applications for self-authenticating microchips and cards, which the company claims can end the systemic US credit card fraud epidemic.
The US loses an estimated $190bn per year to credit/ debit (payment) card fraud, which is more than the country spends on energy, according to Forbes and a 2009 Lexis Nexis study titled ‘The True Cost of Fraud’.
In the case of SIM cards, the fraudsters have discovered ways to evade the security features and gain access to mobile networks to commit crimes under assumed identities and to use the network without payment.
"Experts estimate 2013 fraud losses at $46.3 billion (USD), up 15% from 2011," according to the Communications Fraud Control Association (CFCA).
The company in its patent application said that the new microchip self-authenticates prior to performing any subsequent action or function.
If the chip does not authenticate itself, through the authentication circuit, it does not allow the chip to proceed to process a payment at a point-of-sale (POS) or, in the case of a SIM card, to access the mobile network.
The company has also developed its’ self-authenticating SIM card as an encrypted payment SIM card that can be accepted at any radio-frequency (RF) or near-field communication (NFC) contactless POS.
De Sonneville’s payment cards and payment SIM cards can be used for any amount that the user’s payment limit allows, the company said.