Not new technology, but relatively new to the U.S.:
Chip-and-pin credit cards
Think of a number
Jun 13th 2014, 13:36 by N.B.
The Econo0mist
Washington, D.C.
LATE next year Americans, and foreign business travellers in America, can expect to see a big change at every retail establishment they visit: new chip-and-pin credit-card readers that require customers to enter a pin, rather than sign a receipt, to confirm a transaction. The readers will be paired with a new wave cards that include microchips, rather than the easier-to-copy magnetic strips that dominate in America today. Instead of transferring an entire credit card number during each transaction, the new cards will generate unique authorisation codes. The goal is to reduce fraud.
America is the only developed country that still relies exclusively on magnetic strips and signatures. As a result, it is also the only country in which payment card fraud is growing. Some 42% of Americans have experienced some form of card fraud in the past five years. Of the $11.3 billion lost around the world to such crime in 2012, half was in the US.
The switch will cost retailers hundreds of millions of dollars. But credit card companies have pushed for the change for years. Beginning in October 2015, they will start leaning harder on banks and merchants by shifting the legal liability for fraud to the party with the least-sophisticated technology. That will be a powerful incentive for retailers to upgrade their systems.
Some are already making moves. On June 4th, Sam's Club, a chain of retail warehouses, announced it would begin offering chip-and-pin cards. As Mother Jones notes, JPMorgan Chase and Wells Fargo have made similar announcements. And a huge security breach last year at Target, a discount retailer, seems to have persuaded it to embrace safer technology.
Those of us who travel internationally for business are already used to the difference between American readers and those used in much of the rest of the world—and the accompanying inconveniences. Many automated machines, which are common at petrol stations and supermarkets, do not accept American swipe-and-sign cards at all. And tell a European cashier that you want to sign for a transaction and you will often be met with a bemused look. For those Americans who don't yet have chip-and-pin cards (and that's most of us, since few banks offered them before last year), the coming change will eliminate that awkwardness once and for all. The bottom line for business travellers: if you're not already using a pin with your credit cards, get used to the idea—and start thinking of a good one.
economist.com |
