The U.S. is no Superpower when it comes to card payments: the card hacking headquarters of the world.
Don’t count on credit card fraud going away too soon. After all, Americans practically sleep, eat and breathe credit card use. And it’s those doggone magnetic strips on the cards that keep getting consumers, retailers, banks and the card companies in a fix. The strips make it so easy for hackers—and they know it.
It’s high time that the U.S. switch to encrypted chips in the cards—ready to be launched soon, but security experts aren’t breathing easy yet. The squabbling among banks, card companies and retailers over who’s responsible for protecting consumers isn’t helping, either.
Recently Congress demanded that the financial and retail industry leaders come up with plans for securing customer data. And they’d better act soon or consumer trust in these cards that drive the U.S. economy will take a big dive.
“This has the potential for people to question the viability of our payment system,” points out Venky Ganesan, venture capitalist with Menlo Ventures. Cards are the bread and butter of America, responsible for about 70 billion payments last year, worth $4 trillion (Nilson Report).
Only 11 percent of merchants are sufficiently compliant with the credit card security standards, says a study from Verizon Enterprise Solutions.
The magnetic strip, as innocuous as it appears to the typical consumer, stores that consumer’s personal financial information. Most other nations ditched this “antiquated” system years ago, using instead the EMV: based on chip technology, securing payment transactions.
The payments industry, however, has named 2015 as a deadline to get the chip technology going. But all things considered, that’s still a long ways off. And retailers are whining over the many billions of dollars it will take to replace point-of-sale technology.
Robert Siciliano is an Identity Theft Expert to AllClearID. He is the author of 99 Things You Wish You Knew Before Your Identity Was Stolen See him knock’em dead in this identity theft prevention video. Disclosures.