The golden age of credit card fraud is drawing to a close
The US is about to finally embrace the secure chip-based authentication system called EMV-the standard was pioneered by Europay, MasterCard, and Visa-that the rest of the world has already adopted. Pushed by mounting fraud costs, credit card companies have crafted incentives for merchants to switch to the sophisticated readers needed to accept the cards. "There was a lot of skepticism about whether it would ever happen in the US," says Michael Misasi, an analyst with the Mercator Advisory Group. "All of the data breaches that have happened have woken people up, and progress has been accelerating this year." The first serious milestone is October 2015. By 2020 the swipe-and-sign magstripe reader will be as hard to find as the credit card impression rollers they supplanted.
The end is nigh for online credit card fraud, too. Systems like Apple Pay and Visa's newly announced Visa Token Service (something Discover, Bank of America, Citibank and American Express offered several years earlier) accomplish the same security goals as EMV, but also work online. They replace the static credit card number with a temporary token that changes every time.
http://www.wired.com/2014/09/emv/
The end is nigh for online credit card fraud, too. Systems like Apple Pay and Visa's newly announced Visa Token Service (something Discover, Bank of America, Citibank and American Express offered several years earlier) accomplish the same security goals as EMV, but also work online. They replace the static credit card number with a temporary token that changes every time.
http://www.wired.com/2014/09/emv/
Retailers like it because:
- It saves money. With self-checkouts everywhere, the biggest maintenance you have to do on those machines is restocking change. On a standard checkout, using a card is about as fast as using cash in most instances.
- Effortless payment. You don't have to count out and hand over cash, you don't even have to verify the number and type in a pin (for purchase under $100 here). You just wave your card over the receiver, grab your stuff, and go. Retailers like you to be less conscious of how much you're spending.
People are fine with it for similar reasons. Cash requires planning and overhead (I recently dumped a 30kg bucket of coins at the bank). Card+pin can be fiddly or annoying if you're just buying a sandwich. Contactless options are fast and convenient for small everyday purchases.They also pass a test that eftpos/chip+pin dont: You can quickly pay for a few drinks at a busy pub. It's hard to explain how big a deal that is, but it's something credit cards never conquered. Most pubs here include an ATM so you can turn your inconvenient card into convenient cash before you order anything.
I personally make a rule of using cash when reasonable possible. I'm uncomfortable with having one piece of plastic linked to all my purchases in easily-searchable databases...but I understand the appeal completely. Eventually I'll probably have to go over to it, I just hope there'll be an easy option that still includes some anonymity.