how many have you been reissued after your information was stolen????
our national credit card issuers are dragging their feet on updating their security technology and we are all paying a huge price.
the next time you swipe your card, know that magnetic stripes are unsafe. while we merrily swipe away, remember that our credit card method is on the verge of extinction in the rest of the world.
Beware the next time you want to use your credit card at the check-out counter. This ritual is pretty out-dated and the rest of the world does not do this anymore. The US is the only developed country that seems to be hanging on to the debit cards and credit cards with the magnetic stripes, the ones that you normally swipe at retail outlets.
All the other developed nations have switched over to the smart cards or the chip-based cards. The magnetic stripes on the back of these credit cards are very unsafe. Having account information on that magnetic stripe is as good as writing the information on the post card. All the information that is on the on the magnetic stripe can be copied easily. US merchants, consumers, and banks are spending billions each year to prevent credit card fraud.
The advantage with the smart cards is the fact that the information cannot be copied. Hence, this helps in reducing fraud. These smart cards have the built-in chips and they are equivalent to having it in a safe. The information on these smart cards can only be unlocked with the use of the right key. Since the key information remains hidden, these cards cannot be replicated.
However, the magnetic stripes seem to be so entrenched in the entire system in US that the retailers, banks, and payment processors have been unable to come to a consensus regarding revamping the entire system. At the moment, US are left behind the rest of the world and that is creating problems for the US citizens.
Mallory Duncan who is the general counsel of the National Retail Federation states that the card system in the nation has been dysfunctional for quite some time now. There seems to be an increase in credit card fraud due to the technology which is so outdated. This should have been fixed a long time ago.
Now, there are serious steps that are being taken to swap the conventional cards for the cards for the smart cards in the next few years.
Visa had announced some change in policies last month and that will give the banks and the stores in the US a reason to make the switch and start accepting them at least starting from 2015.
This is a watershed moment states Eric Schindewolf who is the product manager for ‘smart cards’ at Wells Fargo. He added that a number of smart cards are likely to come out in the near future.