Executive’s Desk: Coming soon: Chip-embedded credit cards

Source: National Cyber Security – Produced By Gregory Evans

Major credit card processors are imposing tougher security measures on credit card issuers in the industry’s ongoing efforts to combat credit card fraud. These global standards – called EMV for Europay, MasterCard and Visa, the companies collaborating on the new system – include embedding computer chips into “smart” credit cards that offer greater security for point-of-sale transactions than the magnetic strips on traditional credit cards. Many chip-embedded cards require a personal identification number instead of a signature to complete the point-of-sale transaction and close the security loop; these “chip-and-PIN” cards are the norm around the world, though they’ve been slow to catch on in the United States. One incentive for the changeover is the soaring cost of fraud. According to the payment industry’s Nilson Report, credit card fraud cost banks and merchants more than $5 billion in the U.S. alone in 2012. By contrast, credit card fraud in face-to-face sales has dropped dramatically in countries around the world that have adopted the new technology. The deadline for credit card issuers to offer chip-embedded cards is Oct. 1. After that, the party with the less secure technology will be liable for fraud that wouldn’t have happened with a chip-enabled point-of-sale system. […]

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