We all remember the hype surrounding the new EMV credit cards, which started to enter the marketplace last year. Experts said the cards would make it much tougher for thieves to replicate the cards, virtually eliminating in-store credit card fraud.
But a new report said there are flaws with the new technology.
Here’s what CNN has reported:
“Computer security researchers at the payment technology company NCR demonstrated how credit card thieves can rewrite the magnetic stripe code to make it appear like a chipless card again. This allows them to keep counterfeiting — just like they did before the nationwide switch to chip cards.
They presented their findings at the Black Hat computer security conference on Wednesday.
This claim of a glaring hole in EMV, the chip-based system, is possible because of the way many retailers are upgrading their payment machines: They’re not encrypting the transaction.”
The transitionto EMV cards was very costly for card issuers who had to mail consumers a new card. It was also costly for retailers who had to install new processors that can handle the new card, which can must be dipped into the machine instead of swiped.
The finding is troublesome given the complexity of the transition. Not to mention, consumers have complained that the new EMV cards take longer to process in the store than the traditional swiping method.
Plus, the EMV cards don’t protect against online fraud – only in-store. This is especially worrisome given the rise of online shopping in recent years and the decline of traditional brick-and-mortar stores.