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

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."

Comments

It's about time.

[Bill_the_Engineer]

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

Re:It's about time.

[jellomizer]

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 So now the infrastructure is out of date, this happens.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.

Re:It's about time.

[N0Man74]

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.

Re:It's about time.

[jaymz666]

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.

Re:One question

[alen]

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