At One Payment, we love providing our readers with the latest news on chip card issues. Unfortunately, even with the introduction of chip cards and new card readers, identity theft has hit a record high, and this article will provide you with more information on this ongoing situation.
What’s the Problem?
While the introduction of chip cards was meant to decrease the frequency of identity theft and improve transaction security, identity theft has actually risen. In 2016 alone, identity theft has hit a new high, with 15.4 million people being affected by fraud. This number is up 16 percent from 2015 and is clearly heading in the wrong direction.
The Surprising Source of the Issue
While merchants were given a mandatory deadline to upgrade their card readers to the new technology, many have chosen to incur the penalty. The equipment is extremely expensive, but those merchants who still swipe cards instead of inserting them into a chip reader are already at a much higher risk for fraudulent transactions. Surprisingly, gas station merchants have been given a multi-year extension to the deadline without penalty, which is unfair to other merchants with small businesses.
Another surprising source is the ATM. When customers insert their card into the machine, thieves have a way of stealing the unique transaction code and then duplicating it. All they need is the PIN, and they are able to send that information to another compromised machine.
While no technology is perfect, merchants need to be aware that, while the card readers are expensive and time consuming at first, their business will only be better off in the long run for having enhanced security. Not only will this benefit the business and attract customers, but it will show the customers that the merchant puts everyone’s security as a high priority.