Chipped cards not completely secure | Financial Buzz

Chipped cards not completely secure

Chipped cards or EMV cards are introduced to replace the old swipe cards having magnetic stripes. The older cards were easier for thieves when it came to stealing sensitive financial information or unauthorized duplication for the purpose of committing a crime. Indeed, a number of merchants were squeezed illegal use of old magnetized stripe cards. The EMV initials stand for three credit card companies: Europay, Mastercard and Visa.

Secure EMV cards

The EMV card is now common in a number of countries. They were designed to combat credit card fraud. It’s a code which provides unique transaction changes when used every time. This combating crime factor can be extremely important. The scale of the problem is fathomed when it is found out that fraud related to credit card usage equaled approximately $21 million all over the world. According Nilson Report, the United States saw about $8 billion of that $21 billion fraud. The report covered payment systems.

The EMV card is not swiped like the older magnetic stripe cards. It is dipped. The card must be inserted into the reader for approximately 15 seconds until a sound asks you to take away the card. This shift in liability, meaning making the merchants who are loath to accept chipped cards hold responsible for fraud. Earlier it used to the credit card company. This liability changeover took place on October 1.

Liability and fraud

Sean McQuay of said that the liability is not of the consumer. The latter cannot be liable for fraud. From the consumer point of view, this is excellent news. NerdWallet is a website crafted to provide financial services. However, consumers must be warned that EMV cards do not fully solve the fraud issues.

According to industry professionals, fraud can be classified into three kinds: duplication fraud, stolen card and online fraud. Duplication fraud is common in magnetic stripe cards. The presence of the chip, however, makes this kind of fraud hard. A chipped card can however be stolen. Cards outside the United States frequently come with PIN or personal identification number. A signature is needed in the United States. PINs are rare. Then again, a PIN can be stolen by shoulder surfing- the criminal looking over your shoulder when to tap the keypad. The criminal must also fake the sign. EMV has nothing in common with online fraud. Travelers suffer from this issue the most. Fraudulent bookings are legion.