The End of Disposable Debit Cards: A Closer Look at Discover’s Decision

Discover has ended its “Secure Online Account Numbers” program, which let customers use temporary debit card numbers for safer online shopping. This service, designed to help those worried about using their real credit card info online, was stopped on September 8. Discover notified its customers through email about this change.

Reports from places like The Consumerist and the Chicago Tribune say the sudden stop was due to new security measures meant to protect against card fraud both in stores and online. As a result, Discover seems to have moved away from using disposable debit cards.

While Discover dropped its program, it wasn’t the first to offer something like this. American Express started a similar service in 2000, and then Discover, Citibank, MBNA, and others followed suit. Even after Bank of America bought MBNA, the “ShopSafe” program is still available for customers worried about credit card theft. Citibank also has a working system called the Virtual Account Number program.

People who use these types of security features have good reasons since credit card and identity theft are still significant issues, especially online. Although a report by Javelin Strategy & Research noted a drop in credit card and identity fraud in 2010, the financial impact has actually increased. Fraud costs went down from $56 billion to $36 billion, but consumers’ costs jumped by about 63%. Javelin credits this drop in fraud to more alert consumers and better security and verification practices by credit card companies.

Discover’s email reassured customers they are protected by $0 Fraud Liability. They reminded users, “You’re always protected when using your card with $0 Fraud Liability,” so you can be confident that any unauthorized purchases won’t be your responsibility, whether you’re shopping online or in stores. Thank you for your ongoing trust.