If you was among the 70 million Target customers whose charge card info was compromised this previous holiday season, you might’ve discovered yourself thinking, ‘There’s got to be a better way!’ as you combed through your statements looking for deceptive activity.
As a matter of reality, there is, and it’s been in location in Europe for a decade. It’s called Chip-and-PIN innovation, and it’ll vastly improve credit card security for in-person transactions.
MasterCard and Visa made headlines just recently when they revealed that they’ll be moving to the Chip-and-PIN system (also referred to as EuropayMasterCardVisa or EMV), with a target date of October 2015.
The security enhancement is definitely great information, and it’ll also be beneficial for the United States to lastly sign up with the rest of the world in utilizing this well-proven innovation – however the information is not really all favorable. Here is all that you need to understand about this major infrastructure modification to charge card.
How Chip-and-PIN Innovation Works
The cards you currently carry in your wallet have a magnetic strip on which your charge card info is saved. Unfortunately, it’s relatively simple to catch and copy the details on these magnetic strips, making security a major problem. Include in the reality that our current swipe-and-sign innovation presumes that you’ve actually signed the back of your card which the clerk will inspect your trademark to ensure it matches the one on the card, and it’s quite clear that your charge card info is susceptible.
Microchips on chip-and-PIN, or ‘smartcards,’ on the other hand, provide another layer of security. Like magnetic strips (which will still exist on the brand-new smartcards), these installed chips likewise have the credit card info encrypted on them. When you swipe one of these cards on a chip-and-PIN reader, the terminal verifies that the card is real by checking the chip, and it asks the consumer to type in the 4-digit PIN.
According to Kate Cox of The Consumerist, ‘the chips cut down on card fraud due to the fact that their presence makes cards considerably harder to clone: even if you get all of the details from a card’s magnetic strip, as through a skimmer, without the chip in fact being present, the card information is worthless in a physical deal.’
This suggests that chip-embedded smartcards are harder to clone – even if a swindler were able to get both your charge card info and your PIN.
It’s a Huge Change in a Little Time
Another prospective problem concerns the quantity of time it requires to make a major modification like this. While MasterCard and Visa have actually done their part to incentivize this switch, it’s highly unlikely that smartcard innovation will be a fait accompli by October of 2015. Jaikumar Vijayan reports that, ‘Canada first began relocating to EMV in 2003. Even more than 10 years later, only about 85 % of the nation’s POS systems can take EMV cards – which’s in a nation with a more central payment system and far fewer POS systems, compared with the U.S.’
Basically, there may be some growing discomforts as we implement this technology. In addition, while the chip-and-PIN technology is proven in various other markets, that likewise implies it’s an older technology. There’s the possibility that we’re just now adopting an innovation that’ll become obsolete as we shift to even more safe and secure mobile and online payment options that are simply now appearing.
The Bottom Line
While we’re late to the chip-and-PIN party, it’s great information that the U.S. market is lastly getting proactive about making our credit card info more difficult to take. Nonetheless, no matter exactly how clever our technology ends up being, it’ll always be up to the customer to keep a close eye on their statements and their credit reports – due to the fact that swindlers, much like nature, will always discover a method.
Have you ever been the sufferer of charge card fraud? Will you feel more secure with this new technology?