Swipe? I Don’t Think So: If the thought of being hacked or losing your plastic triggers insomnia, good news awaits: In 2015, U.S. credit cards feature the chip-and-pin technology that’s been around for decades overseas, says the Wall Street Journal. You won’t have to destroy your old cards, but if you long for safer, hack-proof plastic, it’s set to debut in the year ahead—in October 2015, specifically. Visa and MasterCard are already begun issuing new cards devoid of black magnetic stripes and signature lines. Business Insider analysts say the U.S. is currently 10 years behind the rest of the world. Expect a speedy catch-up in the year ahead.
A Little History: After the Target data breach affecting 70 million people in 2014, the Policy Counsel for the Consumers Union gave notice to credit card issuers that the time had come to catch up with other countries. Chip and pin—also known as EMV for the company that invented the technology–thus became the name of the game as financial institutions moved briskly to implement the switch. Multiple layers of security are built into these cards, but proof of their effectiveness is undeniable: in France, hacking and theft decreased by a whopping 78-percent in the first year of using pin-and-chip cards.
Will That Fix Everything? Probably not, but pin and chip is a great bandage on a system that’s grown increasingly corrupted thanks to imaginative hackers and diabolical schemers operating around the world. The credit industry spent 2014 defining migration strategies and while conversion from swipe-and-sign protocols adds safety measures to purchases, it’s not considered a permanent fix. Even the most optimistic industry experts admit that a completely operational EMV environment is still down the road. Less than 60-percent of credit cards and only 26-percent of terminals required for new card transaction processing will be operational by the end of 2015. This is a huge undertaking and bugs (e.g., pesky criminal types intuiting penetration strategies) are likely already at work on the challenge.
All On Board? For the most part. Credit card issuers and merchants are committed to changing the way credit cards are used and supportive of EMV, but that doesn’t mean that looming regulatory issues are moving along at warp speed. Rumors are already swirling around the issue of liability shift that could pit merchants against financial institutions offering chip-enhanced cards. Competing forces within the credit industry plus unknown future regulations, potential customer service problems—even the potential for limited EMV card supplies—lurk beneath the surface. For these reasons and more, you owe it to yourself, your budget and your peace of mind to choose wisely in 2015 as you confront the sheer variety of credit card choices that come your way.
How it Works: You won’t have to learn new behaviors to use plastic in 2015. Outward-facing terminals are at the nexus of the process. You slide your card in, key in your pin and that’s it. Nobody else is party to your transaction. Concludes the Wall Street Journal: Your merchant may still accept your “old” card, but liability issues kick in once EMVs are available and mandated after October. No bank or merchant wants to pay damages for refusing new technology, so expect pressure to use EMVs. Perhaps the biggest difference you’ll experience is that your card never leaves your sight! Say goodbye to wait staff disappearing to run your bar or dining tab. In the future, a terminal will be brought to your table so nobody else touches your plastic but you.
No comments:
Post a Comment