American credit and debit cards have become vulnerable. News of data theft from enormous US retailers became one of the great news clichés of 2014. Target, Home Depot, even delicious P.F. Changs . . . all hacked. And while it might seem that these businesses are simply more lax than we would’ve thought, the problem actually runs a lot deeper than that. The fact of the matter is, when it comes to plastic payment systems, the US is stuck in the era of the floppy disc.
Let’s better understand the problem. Flip your credit card around and look at the magnetic stripe on the back. This “magstripe” contains some very basic information about you and your credit account. Every time you swipe that card, a credit thief has the opportunity to swipe your data. With this information, thieves can run up all kinds of bills and potentially ruin your credit. Worst-case scenarios abound, but most people don’t see their credit exploited even if it is stolen. Despite this, we still live with a little bit of anxiety. Are my credit and debit cards safe? (no) What happens if/when my information gets hacked?
All of this is about to change for the better. There are two innovations coming down the pipe to make consumer data much more secure, at the most vulnerable point: the checkout line. Early adopters are already taking advantage of new mobile technology that lets them pay with the swipe of their phone when buying goods at a register. The technology inherent in these devices enables the data communicated to be much deeper and more complex than that which can be contained in a single magstripe. Because credit card use is much broader than smartphone use, another situation has to be adopted in order to reach most American consumers. EMV cards are this solution.
EMV (Europay, Mastercard and VISA) is your normal credit or debit card, plus a microchip. The microchip, like the mobile phone in the earlier example, contains a wealth of data. This is the information that gets transferred every time you scan your card. But it’s so deep, and new every time you swipe your card, that it isn’t usable for a thief. Even if they were able to steal this data, the information reflects one unique transaction. It won’t work a second time. If you’ve read this far, you’re probably thinking “how do I get one?” Lucky for you, EMV cards are already on their way.
In October of this year, EMV is going to become the new standard for card payment systems nationwide. And it’s none too soon. EMV has already become the standard in the rest of the world: Europe, Mexico, Canada, etc. But because America is big and diverse, it has been hard to find the time and money to make the switch. But it’s happening, and the day is coming fast. All new debit and credit cards issued will have the requisite microchip, and retailers who neglect to update their systems will be liable for any customer ID theft that happens as the result of using archaic technologies. So if you want EMV, just wait. It’s coming. The way you pay won’t change much, but the peace of mind you’ll carry with you most definitely will.