This is about the BNZ credit card protection scheme where you use your BNZ credit card in a BNZ ATM and means this:

"A new protection mechanism for bank and credit cards has been patented worldwide by BNZ, the bank announced today. The technology is aimed at putting an end to “skimming” of cards, where the information on the magnetic stripes is captured by fraudsters without customers’ knowledge. "

...

“On standard bank and credit cards, the information stored on the magnetic strips is static and doesn’t change. With LEN, we’ve made that information dynamic so that it changes every time a customer visits a BNZ ATM – this means if criminals copy the data on the cards they won’t be able to use it for fraud.”

I received a letter from my bank saying they believed my card had been "compromised" and so have put a block on all overseas transactions (whether they are in person or over the internet) until I use it in an ATM or get a new card. The bank won't say what the "compromise" is (I rang them) but it is likely that a merchant that I have used in the past has themselves since been compromised (had stored card details stolen?). I have used my card three times overseas via the internet since I last travelled 8 months ago - all with big reputable companies.

The bank told me it's not just stuff on the card that changes but also information in their system. My question is: what information could these merchants possibly have (and leak) that could be fixed by using a BNZ ATM? They could have my card number, expiry date, name, security code and perhaps billing address, but none of that information would change. They may record authorisation numbers but surely that would be specific to the transaction.

Any ideas?

(Just curious)