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Paying by credit card? Have your zip code handy(Boston Globe, The (KRT) Via Thomson Dialog NewsEdge) Mar. 17--If you pull up to the self-service gasoline pumps in some Boston neighborhoods, or use a credit card to buy aspirin at the local Walgreens drugstore, don't be surprised if you're asked for your ZIP code. It's an effort to fight credit card fraud at gas stations and retail stores. A thief usually won't know the ZIP code associated with the card he's using. So requiring the ZIP code is a simple way to reduce fraudulent purchases. Gasoline retailers say they ask for ZIP codes in areas where credit fraud is a problem. "It is a geographical kind of thing, in a direct response to areas where there has been a high incidence of credit card fraud," said Betsy Eaton, spokeswoman for ExxonMobil Corp. ZIP-code authorization may be coming to a gas pump near you, however. ExxonMobil plans to adopt the policy at many stations that use the Speedpass payment system. Speedpass uses a radio frequency chip embedded in a device that can be attached to a key ring. The transponder on the chip is linked to the user's credit card account. By waving the Speedpass near the pump, the user can instantly pay for a purchase. But a Speedpass can easily be abused if stolen. So some Exxon and Mobil stations will start using ZIP code authorization, although the company will not identify the stations or the schedule. Walgreens in 2001 began demanding ZIP codes from all customers who use American Express cards. "That program is actually only an American Express-sponsored program, and that is essentially fraud protection," said Walgreens spokeswoman Tiffani Bruce. An American Express spokeswoman said the policy was initiated jointly by her company and Walgreens. She added that other national retailers, including Wal-Mart Inc., require customers to provide a ZIP code when paying with an American Express card. In contrast, MasterCard specifically forbids merchants from requiring ZIP codes, except at unattended devices such as gas pumps, or for orders placed by phone, mail, or Internet. Walgreens does not store customer ZIP-code data, Bruce said. Many retailers ask for customer ZIP codes for use in marketing research, but the credit card industry does not permit retailers to record any personal data provided through the credit card processing system. Using the ZIP code to check fraud is possible because of Address Verification Service. A MasterCard spokeswoman said her company introduced the system in 1989 as an additional safeguard. The system compares the ZIP code entered by the card user to the ZIP code of the actual cardholder. It's not perfect -- people change addresses, after all -- but the system has helped card companies cut fraud, according to Bankcard Services, a Los Angeles firm that processes credit card transactions nationwide. In Dorchester, the manager of Roy's Mobil said his station has been doing it for several years. A Mobil station near the intersection of Massachusetts Avenue and Melnea Cass Boulevard adopted the system only recently, however. A Globe survey found that self-service pumps at Mobil stations in Roxbury and Mattapan require credit customers to punch in ZIP codes; Mobil stations in other parts of Boston and in the suburbs generally do not require this. Some customers interviewed at a Mobil station in Roxbury weren't enthusiastic about entering ZIP codes. "I think it's odd, to be honest with you," said Sarah Lafleur of Rockland. Jose Sanchez of Boston called the practice "stupid." But both customers have reconciled themselves to it, and Sanchez said it might even be a good idea. "It does protect us from fraud to a certain extent," he said. Meanwhile, companies that make service-station pumps hope to solve the fraud problem entirely with biometric systems, which will scan a customer's fingerprints. "I think biometrics is going to be the next up-and-coming payment technology, if the public will accept it, said Mike Hardin, a spokesman for Dresser Inc., a Dallas manufacturer of gas-station pumps. With a biometric system, a customer would put his hand on a fingerprint scanner. He'd then swipe one or more credit card associated with his fingerprints. From then on, he'd buy gas by touching a fingerprint scanner mounted on the pump. Hardin foresees some drawbacks. There are 170,000 service stations in the United States, with about eight pumps at each one. Upgrading to biometric hardware would cost millions of dollars. And biometric pumps would require customers to change their habits. "People typically don't want to touch a gas pump any more than they have to," he said. "It's considered dirty." More important, many people will resist the idea of giving their fingerprints to a retailer without strong assurances their privacy will be protected. Still, Hardin said, the rise of biometric gas pumps is just a matter of time. "I think credit cards as we know them now will eventually disappear and go away," he said. |