Later On

A blog written for those whose interests more or less match mine.

Good example of a law that’s needed: EMV credit-card security

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Kevin Hall reports for McClatchy:

At a bustling H&M clothing store in Toronto’s chic downtown area, Canadian shoppers rack up purchases on their debit and credit cards, unaware that they’re getting a level of protection that U.S. consumers lack.

Canadian consumers are issued credit and debit cards that have embedded chip technology, shorthanded as EMV, which provides them a greater layer of security. The chips make it difficult for criminal rings to fabricate counterfeit cards or traffic in stolen cards.

“There’s no question that chip-and-PIN is a much safer technology than signature-based cards, which are a lot easier to replicate,” said Diane Brisebois, the president and CEO of the Retail Council of Canada, the national trade group for retailers.

Canada’s consumer protection is all the more striking given that the United States generated about 27 percent of payment-card purchases yet accounted for 47 percent of global payment-card fraud, the industry newsletter The Nilson Report said last November.

Why is fraud in the United States, which amounted to more than $3.56 billion in losses in 2010, so high? The report and retailers point to the relatively sparse use of the EMV technology, named for the big companies Europay, MasterCard and Visa.

EMV’s embedded chips foil counterfeiters because the chips transmit different unique numbers to the payment processors each time the cards are used rather than customers’ name and signatures. In Canada, the chips are paired with personal identification numbers to add another level of security

The chip cards also aren’t as exposed to data breaches since names aren’t transmitted and thus aren’t in the pool of data that computer hackers often seek. Armed with names and card numbers, organized crime rings can create counterfeit credit and debit cards for use anywhere in the world.

When Americans travel to Toronto or other Canadian cities, their cards still work. But Canadian retailers . . .

Continue reading.

Congress could easily pass a law requiring this protection. Why doesn’t it? I would imagine because banks simply don’t want them to, and (as you’ve doubtless noticed) Congress pretty much toes the line on what banks demand.

Still: it would be interesting if we all emailed our Representative and asked that this credit-card technology be mandated for implementation within a few years. I’m going to, along with a link to the McClatchy story.

You can get your Representative’s email address by entering your ZIP code here. Then click the little “envelope” icon, and there you have it.

UPDATE: Here’s the note I sent Congressman Sam Farr:

See the story at the link below, reported in McClatchy newspapers, on how Canadian credit cards are protected by EMV chips:

The story reports that the US, with 27% of credit card purchases globally, has 47% of credit-card fraud—because in the US credit cards are not protected.

I ask that you pass legislation to require US credit cards to carry EMV chips.

Written by Leisureguy

25 July 2012 at 5:43 pm

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