I even wrote a blog post about it. I probably don't know what I'm talking about, but these were my thoughts at the time:
Wishlist – A Method to Pre-Approve and Track Credit Card Transactions
The issue:
A business using a credit card doing business with a relatively small number of vendors wanting to first avoid credit card fraud (stolen numbers) and secondly wanting to easily track down the offending business.
The idea:
The business would like to approve particular vendors to use the credit card with number 0000-0000-0000-0000 with each individual business pre-approved to run the transaction with a 5th set of identifiable numbers, so something like 0000-0000-0000-0000-0001.
If the credit card is used to make a fraudulent transaction, then ideally, they would have had to have used the 5th set of identifying numbers. This 5th set of identifiable numbers would then allow for easy tracking of the offending vendor, which would allow the business to either re-think doing business with them, or to serve as a starting point discuss security issues with the vendor’s credit card transaction processes.
Summary:
Basically, I believe there may be a need for a new or value added credit card type service. This transaction type would require a 5th set of numbers which have been assigned to pre-approved vendors. This 5 number set (ie. 0000-0000-0000-0000-0002) credit card transaction would most likely prevent theft right off (because the vendor is pre-approved and should provide their own private key (ie. CCV) to put through the transaction). Secondly, if and when the credit card number is stolen and used to make a fraudulent purchase, then, at least with the 5th number set a vendor can be identified and security policy with them can be re-evaluated.
http://www.redbridgenet.com/blogging/wishlist-a-method-to-pr...
My bank in Sweden requires MasterCard SecureCode for all online transactions on their debit cards. Stores that don't support it simply won't work with the card.
So, it's up to the bank how secure they want it to be. The technology is there.
With that said - almost everyone seems to feel comfortable handing out their credit card to random taxi drivers, waiters, sales staff - with no idea whether a copy of their information is being taken down. Heck - if you give them the Credit Card, they even get your CCV as well.