US Expected to See More Credit Fraud as Institutions Battle Over Security Bill
Last week, Target managed to leak the credit card information of 40 million customers—one of the largest credit card security breaches in recent history.
It seems likely that Target’s credit card security mishap will not be the last for the US either, as institutions fight over who should be footing the bill to increase security.
Credit card fraud is becoming a huge issue in the US. Just last year, the US accounted for almost half of all global credit card fraud cases, while only making up a quarter of the total transactions. The main cause for this: outdated technology and a lack of security measures.
While the credit card industries have talked about moving credit transactions to a more secure method, skeptics are wary of just how far the US will be willing to go, or really, how much it will be willing to pay, to make this a reality.
It’s no secret that the magnetic stripe on the back of a credit card is anything but secure (most countries ditched mag stripe back in the 90’s). Thieves can easily nab card information as it passes through the system during transactions, and this information can easily be placed onto duplicate, fraudulent cards.
Yet, merchants are extremely hesitant to adopt further credit card security measures due to costs associated with maintaining them, saying that it’s up to the card companies to issue more secure cards.
But issuers are reluctant to do so, as creating cards with security chips are more expensive.
And while some point to adding an extra security feature as simple as including a PIN code users must type in for each transaction, banks aren’t interested in moving on the idea because they can charge more for—often considered useless—signature verifications.
It seems the push for higher credit card security standards may have to come from the consumer, who, while currently isn’t liable fraudulent transactions, may soon find the risk of having to file a credit fraud claim every time they want to buy a discounted candle holder more inconvenient than just paying with cash.