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The Target breach was the last straw for the Senate Judiciary Committee, and a new credit card system earns some recognition.
The U.S. is the only major market that still uses the magnetic strip card. This slow evolution has led to more fraud in the U.S., says Andrew Tarantola in his article for Gizmodo. Senior U.S. Sen. Richard Blumenthal, at a Senate hearing this year on Feb. 4, exclaimed, “half of the fraud occurs in the United States but only a quarter of the credit use … something is wrong with this picture.”
Other major markets have already moved on to improved card technology, “including a computer chip in each card that stores and transmits encrypted data, as well as a unique identifier that can change with each transaction,” Delara Derakhshani of the Consumers Union said at the hearing.
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Security experts say the recent theft of 40 million credit and debit card numbers from Target shoppers highlights a big vulnerability with how those cards are made and processed.Derakhhshani also shared that after these “EMV (Europay, MasterCard and Visa) smart cards were introduced in France in 1992 … total fraud losses dropped by 50 percent and card counterfeiting fell by 78 percent.”
The traditional magnetic-strip cards the U.S. still uses have become out of date. Many can agree that it is time for a change. And this new chip credit card system may be the solution.
As Tarantola explained in his article, both MasterCard and Visa agreed this was a system that was worth establishing, and made a deadline of October 2015 to transfer over to this new technology.
Along with the chip and pin system Derakhshani mentioned, there is also a chip and signature system, similar to the credit card system the U.S. still uses. The pin and chip system seems to be the most secure, since it is harder to steal a pin number than it is to forge a signature.
We believe it is money well-spent, and it is a penny-wise pound- foolish philosophy to wait any longer.
–Delara Derakhshani
The Bank of America and Chase Bank have already announced in Tarantola’s article the system they will use: the chip and signature system. Even though it is not the most secure system out of the two, it is by far more secure than the magnetic strip we still use now.
The biggest challenge is the time and money it will take to make this transition from magnetic strips to chips. All ATM and bank systems would need to be changed, not to mention all stores. According to Tarantola’s article on Gizmodo, major financial institutions and retailers hope to fully convert to this new chip system within a few years. But the amount of time it will take for this transfer is still unknown.
Regardless of the time and money it would take to make this change, Derakhshani said in the Senate hearing, “We believe it is money well-spent, and it is a penny-wise pound-foolish philosophy to wait any longer.” Kailey McBride is a student at BYU-Idaho with a major in English and an emphasis in professional writing. Email: mcbridekailey@yahoo.com.
