New Credit Card Technology Useless in Curbing Online Fraud
October 2, 2015
Credit card users are witnessing a massive nationwide roll-out of a new credit card technology aimed at securing your information while you shop. While this advancement will go a long way toward cutting down on in-store fraud, this physical addition to your card is being touted as useless in curbing online fraud.
The new credit cards, simply called EMV (which stands for Europay, Mastercard, and Visa, the companies that created it), work by storing your payment information,such as your account information and pin number, in a physical chip that is located on your card. You card can only be read while inputted in new machines that read the chips, which are currently being rolled out in most major stores. Each time you use your card in a “dip” machine, you dip your card for the duration of your transaction, allowing the card time to create a unique one-time payment code that protects your information.
This advancement, while seemingly simple, was implemented to help stem the growing instances of mass hacking that have seen over 50 million US credit card numbers stolen over the past 18 months. It is estimated that by the time the new credit cards have replaced the old magnetic strip cards, which has a final projection timeline of summer 2016, American banks and credit card companies will see a significant decrease in fraud attacks.
However, the chip credit cards are only secure when you use them in a physical store, warns a growing majority of financial reporters and banks. The advancements in credit card technology are limited to the physical nature of the card, leaving online transactions with credit cards the same. This means that all of your account information is still susceptible to an attack from online hackers, regardless if your cards have the new chip technology.
Shopping online with a credit card, then, is seen as a vulnerability, and financial institutions are warning consumers to practice every type of security protocol possible on your cards as you shop online. The chip cannot and will not protect you from online hacking, so it is imperative that you use caution when shopping online. Use only secure websites that use verified options, and never give your credit card information out over social media, email, or the phone.