Europe has been using the ‘EMV’ (Europe-MasterCard-Visa) card since the 1990’s for card and identity theft prevention, reports Herb Weisbaum on NBC News today.
Chip-based ‘smart cards ' already used in Europe are difficult to counterfeit because the account information is encrypted and stored in an embedded microchip. It takes hours or over a day to get through the card encryption.
The U.S. has continued use of cards with the magnetic strips since the 60’s.
Visa, MasterCard, American Express and Discover want the U.S. converted to PIN and chip security by October 2015. After that date, they say, fraud losses will shift to the retailer if they don’t have point-of-sale payment terminals that read smart cards.
Industry observers blame both sides for the long delay in deploying this technology. Neither industry has wanted to move forward with the changeover because of the enormous costs involved.
The cards embedded with chips to scramble the numbers and delay counterfeit of the cards which are sent from the new encrypted terminal is a cost for all involved from credit financial institutions, banks, retailers and the small business owner.
‘Much has recently been made about the ongoing disagreements between the retail community and the banking industry over who is responsible for protecting the payments system,’ Keating said in a statement to CNBC. ‘In our view, it is a shared responsibility of all parties involved. Our existing payments system serves hundreds of millions of consumers, retailers, banks, and the economy well, and we must work together to combat the ever-present threat of criminal activity at our collective doorstops.’
‘We can no longer afford not to do this,’ says Adam Levin, chairman and co-founder of IDentityTheft911.
Alphonse Pascual, a senior security and fraud analyst with Javelin Strategy & Research, told NBCNews that he believes the Target breach could be what it takes to finally get both sides to move on the issue.
While smart cards have been proven to reduce credit card fraud at the point of purchase, they don’t stop all fraud. The account number can still be used to make online or telephone purchases where the card does not need to be presented. This will require other security placed within the online system.
‘We’ve got to start somewhere and this is an obvious solution,’ Pascual said. ‘We know it works. And just because it won’t eliminate all fraud doesn’t mean it’s not worth doing.’
To view more information about the credit card breaches in Target and other cyber security issues, please, view the article listed below in Author’s suggestions and view the video atop this article.