Goodbye Mag Stripes, Hello Chips? Or CryptoCurrency?
Fraud-deflecting microchip embedded credit cards are on their way to your wallet in October 2015. But, according to Visa and MasterCard, it might be too late to thwart the mass credit card hacking which is nearing epidemic levels. All U.S. merchants were advised to switch to “chip-and-PIN” credit card systems by then.
Major credit card companies are urging merchants to prepare for and adopt microchipped cards now, ahead of the deadline, as recently reported by the Associated Press.
Chips aren’t perfect, says Carolyn Balfany, MasterCard’s group head for U.S. product delivery, but the extra barrier they present is one of the reasons criminals often choose to target U.S.-issued cards, whose magnetic strips are easy to replicate.
The chip technology hasn’t been adopted in the U.S. because of costs and disputes over how the network would operate. Retailers have long balked at paying for new cash registers and back office systems to handle the new cards. There have been clashes between retailers, card issuers and processors over which processing networks will get access to the new system and whether to stick with a signature-based system or move to one that requires a personal identification number instead. These technical decisions impact how much retailers and customers have to pay — and how much credit card issuers make — each time a card is used.
With the imperfection and cost posed by microchips, cryptocurrency might just be the best answer for this problem. Not actually using virtual currency but using the technology that makes it highly secure.