US Lagging Behind Globally in Improving Credit Card Security

Data breaches have been big news lately, affecting millions of consumers and costing billions of dollars. The data thefts at Target and Neiman Marcus may force long-overdue change on the credit card industry.

For years, the United States has lagged behind the rest of the world on moving to more secure EMV credit cards, according to Credit cards currently have a magnet strip that contains payment information with a 16-digit number that never changes and is given out hundreds, if not thousands, of times each year. It is relatively easy for a sophisticated thief to steal this information and create a fake card.

An EMV Card, named for developers Europay, MasterCard, and Visa, is a regular-sized card with an embedded chip and a magnetic strip. The transaction information is encoded differently every time, which makes it harder for criminals to steal the date and use them for another purchase. Chip and Pin is a much more secure technology and requires the cardholder to enter a four digit PIN that must correspond with the information on the chip. No personal information about the cardholders account is stored on the chip.

Consumers have not asked for them, so, credit card issuers and retailers have not made the costly switch to EMV cards. While the US accounts for only 27% of the credit card transactions in the world, it is responsible for 47% of card fraud, according to a Nilson Report.

More secure cards wouldn’t have averted the breach, but they would have limited the value of the stored data, reports EMV cards won’t protect against bogus transactions, but they appear to significantly cut down on credit card fraud.

Many analysts believe the cost of absorbing the fraud is still cheaper than converting from magnetic strip to EMV. The cost of adopting the technology is estimated to be anywhere from $15 billion to $30 billion, but fraud costs about 5 cents for every $100 of credit card use, according to the New York Times.

Small business owners may want to prepare for and embrace the change. Visa and MasterCard are pushing for EMV cards and may begin shifting liability to merchants who have not equipped their stores to accept chip cards beginning in 2015. is an independent website that helps consumers easily compare credit cards in a variety of categories such as lowest rates, rewards, rebates, balance transfers and lowest introductory rates. It also gives an unbiased ranking and review for each card. now has an EMV credit cards special page.

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