Abney and Associates Tech Research
Abney and Associates Tech Research: The Credit Card of Tomorrow
SINCE the 1970s, paying with plastic has been pretty standard everywhere: Customers swiped their cards, signed receipts and took home their purchases.
But after security breaches at Target late last year led to the loss of personal data from as many as 110 million customers, the financial industry is racing to adopt technologies that will alter that decades-old ritual.
Driven largely by security concerns, credit card companies and issuers say they are working to make the system as consumers know it obsolete through smart chips and advanced computer programming.
To many, it is about time. The roots of the magnetic strip on credit cards extend back to World War II, ample time for thieves to learn to hack and steal those black lines of prized account information.
Credit card fraud totaled nearly $5.3 billion in the United States alone in 2012, giving the industry plenty of incentive to devise a better system. The amount lost to fraud continues to grow by 30 to 50 percent a year, according to estimates from the Aite Group, a research company.
Efforts to bolster card security were underway well before hackers broke into the systems of Target, Neiman Marcus, Michaels and other store chains. But the recent data breaches injected new urgency into adopting newer technology.
“I think this will become a defining moment about how we in the industry think about security,” said Eileen Serra, the chief executive of Chase Card Services.
The credit card industry, especially in the United States, has long relied on increasingly sophisticated analytical programs to weed out potentially fraudulent transactions. But it has also focused on a handful of technologies it contends will better protect customers in stores and online.
One is placing microprocessors onto cards, a standard known as E.M.V. for its initial backers: Europay, MasterCard and Visa. Another is known as tokenization, a way of masking consumers’ card information over the Internet.
Read full article at The New York Times