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Death Hovers Politely For Americans' Swipe-and-Sign Credit Cards

Posted by timothy on from the upgrade-your-skimmers dept.

schwit1 writes "U.S. banks and merchants are shifting to a more secure way of authorizing credit card transactions in which customers will enter a personal identification number (PIN) at checkout instead of signing a receipt. The US is the last major market in the world using the signature system, which is part of the reason why a disproportionate amount of credit card fraud happens here. The change is especially relevant given the massive fraud perpetrated against customers of Target in the fall. During a Congressional hearing last week, Target CFO John Mulligan said the company is accelerating the $100 million effort to switch to the so-called "chip and pin" system. The change won't happen all at once. Banks must issue cards with microprocessors and merchants need the right equipment to process the chip and PIN transactions, which is likely to happen gradually. But Visa, American Express, and MasterCard have announced that banks and merchants that have not adopted the technology for face-to-face transactions by October 2015 will be liable for fraudulent purchases. That's a strong incentive to get up to date. The new system will also prepare merchants and banks to transition to contactless payments in the near future."

10 of 731 comments (clear)

  1. It's about time. by Bill_the_Engineer · · Score: 5, Insightful

    Finally the US banking system is catching up to the rest of the world.

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    1. Re:It's about time. by SerpentMage · · Score: 3, Insightful

      I was about to write this as well. We have been using pins for credit cards in Switzerland for the last 10 years...

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    2. Re:It's about time. by jellomizer · · Score: 5, Insightful

      I don't get why they are trying to catch up, banks are dropping the ball here, and they should focus on exceeding the rest of the world.

      Why is the US behind everyone, well because we were first to come up with the initial infrastructure, by the time something new came along, we had a large complete infrastructure. So now the infrastructure is out of date, this happens. But when it does we need to try to invest into the next step, not the current, otherwise we will always be catching up.

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    3. Re:It's about time. by N0Man74 · · Score: 4, Insightful

      I was about to write this as well. We have been using pins for credit cards in Switzerland for the last 10 years...

      Yeah, why hasn't the US got on board yet with implementing technology that allows banks and issuers to absolve themselves of responsibility and push the blame onto the consumers?

      If fraud happens on these new cards, it becomes up to the consumers to prove that it was fraud and that they did not compromise their PIN.

      As a bonus, the consumers get to be forced to memorize a new PIN!

      It's Win WIn.

    4. Re:It's about time. by dr.Flake · · Score: 3, Insightful

      Welcome to the 21st century.

      Now if you guys could do something about the insationable hunger for credit. You guys already live from the credit of the rest of the world. Sure it stimulates the economy, but in the real world you can only spend a dollar once.

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    5. Re:It's about time. by jaymz666 · · Score: 4, Insightful

      This puts the risk entirely on the consumer side. They have to monitor their account daily now.

      Your debit card is somehow compromised, someone makes a purchase with it that takes your account to well below the balance you expect to be there, your rent is due and has been set to be paid and the balance in your account is hundreds less than you expect it to be.
      Rent bounces, you're charged a fee. Or better yet, your bank approves the rent to go through and you are negative, all your other charges go through for lunch, for groceries, whatever. You get hit with fees for all these transactions. Then you have to fight with the bank.

      Yeah, no risk at all.

      This may sound hypothetical but I assure you, it's not.

  2. Re:One question by alen · · Score: 4, Insightful

    the USA had credit cards first
    any time you are first you build up a system and its hard to change. if you adopt a tech later in its lifecycle you go with the latest tech at the time

  3. Re:One question by Alioth · · Score: 3, Insightful

    That isn't a good explanation in this case. The UK (and pretty much every European Union country) for instance had a swipe and sign credit card infrastructure just like the United States decades before the introduction of chip and PIN, yet the UK changed to chip and pin 10 years ago despite having the same infrastructure issue as the US.

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  4. Re:Umm.. just as Europe moves beyond chip and pin. by jareth-0205 · · Score: 3, Insightful

    Fingerprint is a terrible security mechanism. Not only does it give someone a reason to steal you *finger*, you also leave your fingerprint on everything you touch. Credentials shouldn't be revealed unless you are actually in the process of using them.

  5. Re:Tin foil hats! by __Reason__ · · Score: 3, Insightful

    Actually, modern cards not only have the contact chip but also a "Contactless" mode that can be used for small payments.

    So you can pay for your Starbucks or bus fare instantly just by tapping your Visa card, no need to swipe or insert the card and enter a PIN number. This is all still more secure than Swipe & Sign, because the cards can't be easily cloned and theres a relatively low transaction limit.