While the nationwide shift to EMV chip card technology is on its way with approximately 600 million credit card users expected to use the new technology by the end of the year, cyber security experts believe that the EMV chips may not protect users against fraud.
Although credit card issuers tout them as the next best thing in keeping cyber thieves at bay, experts claim that the tiny chips are not that secure and credit card crime rate may even climb after their adoption. However, that has little to do with the technology, but to external factors.
As states issue new rules to establish who would pay in case of credit card information is stolen, more and more credit card issuers and retailers will switch to EMVs as a way of preventing credit card fraud. But analysts claim that the move may have the opposite effect, at least in the short run.
EMV chip card developers say that their chips are safer than traditional magnetic stripe cards. Developers explained that the magnetic stripe can be scanned by cyber criminals for precious data stored on the card. That data can later be duplicated and the credit card is compromised.
EMV, which stands for the initial letters of the companies that developed the standard – Europay, MasterCard, and Visa, generates a unique code when a payment is processed making it impossible for a thief to use the stolen data and use it in other purchases.
But the EMV cards require new reading terminals, so credit card issuers recommend customers to be extra careful when using traditional terminals since fraudsters may be interested in the latter because they are easier to break than chip terminals.
But EMV is not a universal solution to all credit card-related problems. Security experts explain that EMVs have some vulnerabilities especially if a party involved in a commercial transaction doesn’t use the technology.
For instance, a buyer may have an EMV credit card but the merchant may use an old reader. Experts believe that in this particular case the upgrade to EMV technology was useless.
After the EMV technology becomes mainstream, experts believe that criminals may focus on other types of frauds, the ones that don’t require a credit card and a terminal to complete a transaction such as telephone or online payments. Moreover, gas stations are not required to switch to the new technology sooner than 2017 due to excessive costs, so they and their customers may still be exposed to fraud.
Expert warn that EMV implementation may trigger a spike in frauds that don’t require a credit card to be physically present. These rates jumped 120 percent after EMVs were brought to the U.K. The same situation may happen in the U.S., as well, experts believe.
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