LONDON, U.K. — The days of swiping plastic are as arcane as Walkmans, and according to Paul Green, partner and security expert at Harter Secrest & Emery LLC, the chip and pin method is going the same way – credit cards are to be replaced with chips embedded with microprocessors.
“Card brands are taking on a greater level of responsibility,” Green said, “but at a lower amount. People expect breaches to be smaller with ‘chip and pin’. Europe embraced the ‘chip and pin‘ technology decades ago,” he continued, and it cut fraud by about 60 percent.
“The United States didn’t follow suit, he continued, “because credit card issuers felt ‘it cost less to pay for the breach than it does to pay for technology. Recent breaches have changed that thinking’.”How fast the country can move to install the necessary hardware and software, he said, remains a question.
“It’s a big move and everybody has to work together.”
Card chips containing microprocessors sounds a little sci-fi and nano-technology, but even if you’re not as tech savvy as some who already use Apple Pay or Google Wallet, credit card security is already in the works for a major overall and rethink. Experts expect many merchants to have made the switch from the traditional credit card readers to the new readers by October 2015.
Leading the field, both Visa and MasterCard card issuers are taking on the new type of credit card containing this new technology. The computerised chip possesses a far superior form of encryption over the old magnetic strips you find on the current cards. Scrapping the magnetic strip eradicates the ability to ‘skim’, a method criminals use to clone cards via ATM electronic skimmers.
Although consumers may have been put off by credit cards because of the security breaches highlighted in the media, experts expect to see a rise in applications for credit cards.
Adding to the new security technology on the horizon, card issuers like Clydesdale Bank are also offering 0% APR Gold Card deals as you can see on their bank site to remind people credit cards are not only a secure solution to organised consuming and financial planning, but they also provide debt solutions above and beyond those offered by the high % APR ‘Pay Day’ lenders currently making the rounds.