It’s Time for Smart Chip Technology on U.S. Credit Cards

21 Jan

As we recently posted, data security — and the lack thereof — is a huge problem that needs to be fixed for both retailers’ and shoppers’ protection. First, let’s look at some more statistics. Then, let’s consider the best solution.

According to a Ponemon Institute study, as reported by the Wall Street Journal, security breaches have skyrocketed at North American American retailers.

What’s the best solution, keeping in mind that nothing is foolproof?

Harvey Bronfman, an entrepreneur and angel investor, puts it this way: “Why hasn’t the U.S. made the credit-card techno-leap? … it is all about who bears the multi-billion-dollar tab. Until now, cost-benefit analyses by banks and large retailers have concluded that eating the cost of data theft is cheaper than changing over to a more secure system, according to industry analysts. That is perhaps the biggest reason the world’s largest consumer market is so far behind the eight ball on purchasing technology.”

Paul Ziobro and Robin Sidel, writing for the Wall Street Journal, state that:

“Target Chief Executive Gregg Steinhafel is calling on retailers and banks to adopt chip-based credit-card technology to better protect shoppers. But the debate was different a decade ago, when the executive was on the other side of the issue as Target pulled the plug on a $40 million, three-year program that did just that.”

“Chip-based credit cards — in which a smart chip in the card works with special readers installed at stores — are widely used in Europe and Canada, making it more difficult for thieves to profit from the sort of massive data breach that hit Target over the holidays. But the technology has yet to be embraced in the U.S., and as a result, the U.S. has become the preferred target for criminal hackers.”

Click on the image below and then scroll down the WSJ page to see a video clip on this story.

Photo by Getty Images

 

2 Responses to “It’s Time for Smart Chip Technology on U.S. Credit Cards”

  1. randell varona January 30, 2014 at 11:58 pm #

    The United States needs this technological advancement whereas they will help protect us who have credit cards, but as well as our credit card providers.

    For example, I have a discover credit card which was once used by someone I did not know and I had to call discover and cancel the whole account to make another. Being that discover is reliable, they had to credit my account back the 40 dollars. If we had the advancement of it being harder for hackers in our credit cards than it would benefit both the people as well as providers in a sense.

    It is annoying to have to keep on checking your cards to see if someone hacked into them or be scared going into a store such as target and knowing there is a big chance of somebody recieving all of your personal information.

    There are too many criminals in the United States for them not to invest in the techno-chip in cards.

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