Global payment system standardization is the process of implementing uniform technical, organizational, and legal standards for processing, protecting, and monitoring financial transactions worldwide. This can significantly reduce the incidence of carding (fraud using stolen bank card data) by eliminating vulnerabilities, enhancing security, and improving coordination between payment system participants. Below, I will discuss in detail how standardization contributes to the fight against carding, focusing on educational aspects, including mechanisms, examples, and potential limitations.
Educational aspect: Standards such as EMV and 3D-Secure rely on cryptography and dynamic data generation. For example, EMV uses RSA or AES encryption algorithms to generate one-time codes, while 3D-Secure adds a second layer of verification, reducing the likelihood of unauthorized access. Students studying cybersecurity will benefit from understanding how these technologies interact with the infrastructure of banks and merchant platforms.
Example: In 2013, hackers breached the Target retailer's database, stealing 40 million card details. This occurred due to non-compliance with PCI DSS standards. If global standards were strictly adhered to, such incidents would be less likely.
Educational aspect: It's important for students to understand that encryption is not only a technical measure but also an organizational one. PCI DSS, for example, includes 12 requirements covering everything from access control to network monitoring. Studying such standards helps them understand how a comprehensive approach protects data at all stages of processing.
Example: Payment systems such as Visa and Mastercard already use global monitoring networks (Visa Advanced Authorization, Mastercard Fraud Scoring). If such systems become mandatory for all market participants, carders will be more difficult to circumvent protection.
Educational aspect: Students interested in AI and data analysis can benefit from studying how fraud detection systems work. For example, machine learning algorithms use clustering and classification to separate transactions into "normal" and "suspicious." This requires large volumes of data and computing resources, highlighting the importance of global collaboration.
Example: In 2019, an international operation by law enforcement agencies in Europe and the United States resulted in the closure of a darknet marketplace selling card data. This was made possible by coordination through standardized communication channels.
Educational impact: Students studying international law or cybersecurity benefit from understanding how standards like ISO 20022 facilitate global cooperation. It also highlights the importance of an interdisciplinary approach, where technology and law work together.
Example: In the US, the transition to EMV cards began later than in Europe, making the country a target for carders in the 2010s. Global standardization could accelerate this transition and reduce vulnerabilities.
Educational aspect: This demonstrates how technological inequality impacts security. Students will benefit from studying how economic and infrastructural factors influence technology adoption in different countries.
Example: Awareness campaigns in Europe (such as Europol initiatives) have reduced the number of phishing victims, which has reduced the amount of stolen data for carding.
Educational aspect: This emphasizes the importance of cyber hygiene. Students can benefit from studying the psychology of fraud and social engineering techniques to understand how education can be a protective tool.
Educational aspect: It is important for students to understand that standardization is not a one-time solution, but a dynamic process that requires constant monitoring and adaptation.
1. Unified security protocols
Carding often relies on exploiting weaknesses in payment systems, such as the lack of modern authentication methods or vulnerabilities in data processing. Global standardization can implement mandatory security protocols that minimize these risks:- Chip-based payment technology (EMV): EMV standards (Europay, Mastercard, Visa) use microchips on cards instead of magnetic stripes. Chips generate a unique code for each transaction, making stolen card data virtually useless to fraudsters. For example, in countries where EMV has become mandatory (such as Europe), the level of card theft in brick-and-mortar stores has significantly decreased compared to regions that still use magnetic stripes.
- 3D-Secure: This is an additional authentication protocol for online transactions (e.g., Verified by Visa, Mastercard SecureCode). The user confirms the transaction using a password, one-time code, or biometrics. Global standardization makes 3D-Secure mandatory for all online payments, reducing the likelihood of stolen card data being used online.
- Tokenization: Tokenization replaces actual card data (number, expiration date, CVV) with a unique digital token that is useless outside of a specific transaction or device. For example, Apple Pay and Google Pay use tokenization, making data interception pointless. If tokenization standards become mandatory for all payment systems, this will dramatically reduce the opportunities for carders.
Educational aspect: Standards such as EMV and 3D-Secure rely on cryptography and dynamic data generation. For example, EMV uses RSA or AES encryption algorithms to generate one-time codes, while 3D-Secure adds a second layer of verification, reducing the likelihood of unauthorized access. Students studying cybersecurity will benefit from understanding how these technologies interact with the infrastructure of banks and merchant platforms.
2. Unified standards for encryption and data protection
Carding often occurs due to data breaches, such as when online store or payment gateway databases are hacked. Global standardization could establish uniform requirements for data encryption and storage:- PCI DSS (Payment Card Industry Data Security Standard): This is an international standard for payment card data security. It requires companies processing card data to use encryption (such as TLS for data transfer), restrict access to information, and conduct regular security audits. If PCI DSS becomes mandatory for all participants in the payment ecosystem, it will reduce the likelihood of data breaches.
- Unified encryption protocols: Standardization could mandate the use of modern encryption algorithms (e.g., AES-256) and prohibit outdated ones (e.g., SSL 2.0). This will prevent data interception during transactions.
- Data masking: Standards may require that sensitive data (such as a card number) be stored in a masked form (for example, only the last four digits are displayed). This reduces the value of stolen databases to carders.
Example: In 2013, hackers breached the Target retailer's database, stealing 40 million card details. This occurred due to non-compliance with PCI DSS standards. If global standards were strictly adhered to, such incidents would be less likely.
Educational aspect: It's important for students to understand that encryption is not only a technical measure but also an organizational one. PCI DSS, for example, includes 12 requirements covering everything from access control to network monitoring. Studying such standards helps them understand how a comprehensive approach protects data at all stages of processing.
3. Coordinated fraud monitoring and detection
Carders use complex schemes, such as mass testing of stolen cards (carding attacks) or purchasing goods through fake accounts. Standardization allows for the implementation of global monitoring systems:- AI-based systems: Uniform standards could require banks and payment systems to use machine learning algorithms to analyze transactions. These systems identify anomalies (such as purchases in unusual locations or for large amounts) and block suspicious transactions in real time.
- Fraud data sharing: Standardization simplifies the creation of global databases of fraudulent transactions. For example, if a carder uses a stolen card in one country, this information can be instantly transmitted to banks in other regions, preventing further attacks.
- Universal standards for FDS (Fraud Detection Systems): Fraud detection systems can use unified metrics and algorithms, which increases their accuracy. For example, a standard might require analysis of geolocation, device, and user behavior for each transaction.
Example: Payment systems such as Visa and Mastercard already use global monitoring networks (Visa Advanced Authorization, Mastercard Fraud Scoring). If such systems become mandatory for all market participants, carders will be more difficult to circumvent protection.
Educational aspect: Students interested in AI and data analysis can benefit from studying how fraud detection systems work. For example, machine learning algorithms use clustering and classification to separate transactions into "normal" and "suspicious." This requires large volumes of data and computing resources, highlighting the importance of global collaboration.
4. Simplifying international cooperation
Carding is a transnational crime. Fraudsters can steal card details in one country, use them in another, and cash out in a third. Differences in legislation and technical standards make it difficult to combat such schemes. Global standardization solves this problem:- Unified data formats: Standardizing data exchange formats between banks and law enforcement agencies simplifies investigations. For example, the ISO 20022 standard for financial messages enables the unification of transaction information, which speeds up the detection of fraudulent transactions.
- International agreements: Standards may include commitments by countries to work together to combat carding, for example through the sharing of information on cybercriminals or the extradition of suspects.
Example: In 2019, an international operation by law enforcement agencies in Europe and the United States resulted in the closure of a darknet marketplace selling card data. This was made possible by coordination through standardized communication channels.
Educational impact: Students studying international law or cybersecurity benefit from understanding how standards like ISO 20022 facilitate global cooperation. It also highlights the importance of an interdisciplinary approach, where technology and law work together.
5. Eliminating vulnerabilities in local systems
Different countries and regions employ different levels of security. For example, in some developing countries, magnetic stripe cards, which are easily cloned, are still widely used. Global standardization eliminates these weak points:- Mandatory adoption of modern technologies: Standards may prohibit the use of outdated technologies such as magnetic stripes and mandate the transition to EMV, NFC, or biometrics.
- Equal access to technology: Standardization may include support programs for countries with less developed infrastructure to enable them to implement modern payment systems.
Example: In the US, the transition to EMV cards began later than in Europe, making the country a target for carders in the 2010s. Global standardization could accelerate this transition and reduce vulnerabilities.
Educational aspect: This demonstrates how technological inequality impacts security. Students will benefit from studying how economic and infrastructural factors influence technology adoption in different countries.
6. Training and awareness raising
Carding often exploits human factors, such as phishing or social engineering. Standardization may include educational programs:- Consistent recommendations for users: Standards could require banks and merchants to inform customers about secure practices, such as using two-factor authentication or checking URLs before entering card details.
- Employee training: Payment processing companies may be required to conduct regular staff training to prevent errors that lead to data breaches.
Example: Awareness campaigns in Europe (such as Europol initiatives) have reduced the number of phishing victims, which has reduced the amount of stolen data for carding.
Educational aspect: This emphasizes the importance of cyber hygiene. Students can benefit from studying the psychology of fraud and social engineering techniques to understand how education can be a protective tool.
Limitations and Challenges
Despite the benefits, global standardization faces a number of challenges:- Differences in legislation: Countries have different data protection laws (for example, GDPR in Europe and CCPA in California), making it difficult to create uniform standards.
- Economic barriers: Implementing modern technologies such as EMV or tokenization requires significant investment, which can be a challenge for developing countries.
- Resistance to change: Some companies and banks may resist standardization due to the need to redesign their systems.
- Evolving threats: Fraudsters are constantly adapting, developing new methods, such as attacks on biometric systems or using AI to counterfeit transactions. Standards must be updated regularly.
Educational aspect: It is important for students to understand that standardization is not a one-time solution, but a dynamic process that requires constant monitoring and adaptation.