After major data breaches in the United States to companies such as Target and Neiman Marcus, Congress is pushing down on businesses to adopt a new type of smart card.
When you look at your credit card, you will notice the black magnetic strip on the back of the card. This strip is how we use and interact with the card. When you scan your card to complete a payment, the strip releases loads of personal information such as account numbers, full name, and other customer identifiable information which is then stored on the company’s servers.
Introduced back in 1992 in France, Europay, MasterCard, and VISA, aka EMV, cards are smart cards incorporated with a small computer chip instead of a magnetic strip. This provides a stronger level of security by either using a chip access code and PIN or chip access code and signature. Unlike the EMV, magnetic strips can be easily read, written, deleted or changed with inexpensive equipment and minimal experience.
So, why is the US Congress looking to move to this new type of payment? Well, in a connected world, everybody’s data is at risk. This new EMV card provides more security for people and, by pushing businesses to adopt the technology, it will then push the consumer to use it as well. Congress is estimating around 50 to 70 million smart cards to be active by the end of this year.
The US has been using the magnetic strip since the invention of credit cards, so the change now will take some getting used to. At a $35 billion cost to switch from magnetic strips to EMV cards, I personally would rather see the money spent elsewhere. Sure, the US needs to better protect its security, but Congress should be suing or fining companies, like Target, for their lack of security.
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