In the article is this quote: ""The card system in this country has been dysfunctional for a long time," says Mallory Duncan, general counsel of the National Retail Federation. "We have far, far too much fraud because we have a very antiquated payment system relative to the rest of the world. This is something they should have fixed a long time ago."
Yes, American credit cards have a magnetic strip - which holds information about the user, the account, and more. What is really happening to your credit card in the restaurant when the server takes your card and your bill to the back room to process it? It is out of your sight and out of your control. The card reader reads the magnetic strip (and it is possible for the server to write down your account number, expiration date and even the CVV number on the back. Later they can go on line, order something, have it delivered to an anonymous place and fraud has occurred.
The new cards have a chip in them and the servers have to bring the reader to your table and you have to enter a pin - no disappearing into the back room with your care. The server doesn't even touch your card, doesn't see your account number or expiration date or CVV value. Even if the card is stolen, unless the criminal knows (or can guess) your code, you are safe.
Unfortunately, there will need to be new card readers for the new cards to work. The technology in swiping cards is old, while the new will be wireless devices brought to your table or on the checkout stand - where you swipe (or tap) and enter your pin. It will take a few years (Visa says by 2015) to make the change.
2 comments:
This concept sounds great and is definitely long overdue. I have never trusted having my card out of sight. I can't wait till it's implemented everywhere!
Absolutely!!! Some fraud protection!!!
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