Will Credit Cards Be Safer in 2012?

November 29, 2011
Fox Business 
credit card news

Although magnetic stripe cards are vulnerable to skimming and other forms of fraud, U.S. merchants and consumers have been hesitant to use PINs to authenticate purchases as their counterparts in Europe have done. Visa says that just 25 percent of American consumers choose to enter a PIN when given the opportunity to do so, which it found was due to the inconvenience and the expense involved in making a PIN-based transaction. Because consumers are reluctant to use PINs, Visa and other payment platform providers have promoted the use of contactless versions of the EMV chip, which has helped reduce the severity of identity theft attacks in Europe. A version of this technology also is being used in some Google-branded smartphones. Visa is promoting its contactless technology by offering financial incentives to merchants, but it may be as long as five years before merchants install EMV-compatible card readers at the point of sale. Meanwhile, banks are offering consumers protection from identity theft, and are working to identify fraudulent transactions. Javelin Strategy & Research president James Van Dyke says banks are doing the right thing by trying to identify fraudulent transactions instead of relying only on new technologies such as contactless EMV.
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