Once you know how it works, it's easy to assign a numeric value for each LCD window. Conveniently there are 7 panes that make up an LCD, with each one either on or off. Huh, seems very similar to ASCII. You come up with a standard representing that (maybe there is one?), and now I can use ASCII to describe which of the lines are on or off. Using top-to-bottom, left-to-right the one in the video could be described as:
0110010 _ 0011000 0100010 _ 0011001 0010100
2_chr(24) "_â â
OK, so it's not perfect, but still, it would be easy to convert to an easily storable value. Once that is done, you can go further to decode the challenge with a script, and voila, you have all the stuff you need to use the card fraudulently. It would take a bit more work, but once you have it, you're toast.
Not only that, but it would be fairly easy to reverse engineer. Now it WOULD make it harder for people to steal the database and use the card, since that's not stored by any of the merchants who accept cards, so a DB dump from an ecommerce site would result in less fraud if this were widely implemented. Recurring transactions would be problematic though; how could I rebill a credit card each month for a dynamic number without the cardholder entering in the code? And who is generating the challenge? Me? The credit card purveyor? How? Are they sending me an image, or just numbers and I have to generate the image?
A unique idea, and it does solve the problem of stealing credit card databases. And it is cheap and easy to put on a card, it's the whole backend system that is the biggest challenge. Though if Payflow Pro (PayPal) and Authorize.net implemented it, it would probably do a lot of damage to the card fraud industry.