The Federal Bureau of Investigation didn’t offer any comment Friday on what happened to the original post, apparently putting itself in the middle of an ongoing controversy between bankers and retailers over cardholder authentication with the new credit card chip technology that is replacing the magnetic-stripe payment cards that have been traditionally used in the United States.
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Debit and credit cards are getting a new look. Retailers have asserted that their investment of billions of dollars in new terminals to support the new credit card technology through the use of chip cards should be accompanied by a willingness by banks and card companies to support PIN technology. But even with the new cards, most issuers only require a signature upon check-out.
“I think the banks are looking at this seriously because it is, for the first time, an opportunity for them to take themselves out of the liability equation whereas before they shouldered the burden with these types of card transactions”, said Grillo.
The warning may come as a surprise to a few Americans given that the EMV cards (short for Europay, MasterCard and Visa) are touted as using technology that can thwart fraudsters. “Our first priority is protecting our customers’ financial data from misuse – chip technology is the best way to accomplish that for transactions at retail merchants”. The computer chips can’t be duplicated. “Currently, not all EMV [chip] cards are issued to consumers with the PIN capability and not all merchant [point of sale] terminals can accept PIN entry”.
But if the card is created to require a PIN, a counterfeit card would be no good unless the thief also had the person’s PIN, which is nowhere on the card. At one recent visit to a J.C. Penney, a store clerk was unaware of the switch to the new cards, and told this writer to swipe her card rather than use the slot for her EMV-enabled card.
The problem, in the FBI’s view, is that while a chip card is an improvement, it “does not stop lost and stolen cards from being used in stores, or for online or telephone purchases when the chip is not physically provided to the merchant”. A Target spokesperson didn’t immediately reply to a request for details. Business consumers will need to apply for a card using their EIN or SS number. So they’ll need to give their new card information to any companies that are paid automatically, such as for gym memberships or cell phone service.
Target suffered a massive date breach at the end of 2013, which exposed the personal information of up to 70 million shoppers.
The article also discussed how consumers who prefer using their debit cards doesn’t have to feel stressed over an interest rate because there is none.
According to Michael Grillo, director of product marketing for ACI Worldwide, many banks have likely chose to reissue their cards in waves due to the costs involved with reissuing cards to their entire customer base all at once.
The computer chip – a small, metallic square on the front of the card – assigns a one-time code to each transaction, making every transaction unique and the card more hard to counterfeit or copy.
Cards with PINs are standard in Europe and many other parts of the world.
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“Retailers have long-argued that PINs are essential to providing cardholders with the security that they deserve”, said Brian Dodge, executive VP of RILA.
