Infineon Technologies AG (FSE: IFX / OTCQX: IFNNY) has launched two new secured prepaid tag solutions aimed at addressing the escalating fraud risks in the gift card market. Targeting both open loop and closed loop prepaid cards, the solutions are designed to protect consumers, merchants, and card issuers while streamlining transaction processes through advanced chip-based security and NFC technology.
The introduction comes amid growing concern over gift card fraud in the U.S., where consumers reportedly lose $1 billion annually due to tampered or compromised cards, according to the U.S. Federal Trade Commission (FTC). Data compiled by the FTC indicates that gift card fraud accounts for roughly 25% of all fraud reports, while 34% of U.S. adults report being directly targeted or knowing someone affected by gift card scams. Operational costs for merchants are even higher, with studies by Chargebacks911 estimating that for every dollar lost to gift card fraud, merchants incur an additional $4 in overhead to detect, manage, and resolve incidents.
Infineon’s secured solutions replace conventional barcodes, magnetic stripes, and printed codes with embedded NFC chips that leverage cryptographic mechanisms to secure all sensitive card information. These chips enable consumers to activate, redeem, and check balances simply by tapping their NFC-enabled phones or devices, eliminating exposure to visible card codes and reducing opportunities for fraud.
The secured EMV prepaid tag solution is tailored for open loop gift cards and allows tap-and-pay transactions at any merchant terminal or retail outlet within payment networks, supporting Visa and Mastercard applets. Conversely, the secured prepaid tag solution is aimed at closed loop gift cards, which operate within retailer-specific ecosystems, enabling secure in-store transactions without the risks associated with broader networks.
“Gift card scams range from tampered or expired cards to social engineering attacks where fraudsters trick consumers into revealing card IDs,” said Tolgahan Yildiz, Head of Trusted Mobile Connectivity and Transactions at Infineon. “Our secured prepaid tag solutions secure all actionable data on protected chips, accessible only to the issuer, retailer, and valid cardholder, rendering traditional theft attempts ineffective.”
Infineon has partnered with Karta Gift Card Ltd., a provider of secure processing and cryptographic validation for prepaid gift cards. Karta’s platform supports AES encryption protocols and provides real-time authentication with every tap, ensuring seamless and secure card use. David Anderson, Co-founder and Co-CEO of Karta, said, “By integrating Karta’s cryptographic validation technology with Infineon’s secure NFC chips, we provide dynamic, end-to-end protection against cloning, skimming, and replay attacks, setting a new benchmark for prepaid card security.”
The new solutions are fully compatible with existing manufacturing processes. The closed loop solution works with current smart card and paper ticket infrastructures, while the EMV prepaid tag aligns with the latest Visa and Mastercard applets. By supporting both open loop and closed loop ecosystems, Infineon enables widespread adoption among retailers and corporate gift card issuers.
As the prepaid gift card market grows at a 9% compound annual growth rate, Infineon’s new solutions offer a combination of security, convenience, and operational efficiency. The solutions reduce fraud risk, safeguard consumer trust, and decrease the financial and operational burden on merchants, while also promoting secure digital adoption in the retail and enterprise prepaid card space.
