US lags in credit card security
Target data breach highlights problem of old technology that leaves millions of American consumers wide open to high risk of fraud
The massive data breach at Target this past week has again highlighted how the United States remains a relatively insecure backwater when it comes to credit card technology.
Over the last decade, most countries have moved towards using credit cards that carry information on embeddable microchips rather than magnetic strips. The additional encryption on so-called smart cards has made the kind of brazen data thefts suffered by Target almost impossible to pull off in most other countries.
Because the US is one of the few places yet to widely deploy such technology, the nation has increasingly become the focus of hackers seeking to steal such information.
The stolen data can easily be turned into phoney credit cards that are sold on black markets around the world.
"The US is one of the last markets to convert from the magnetic stripe," said Randy Vanderhoof, director of the EMV Migration Forum. "There's fewer places in the world where that stolen data could be used. So the US becomes more of a high-value target."
EMV stands for Europay, MasterCard and Visa and is the technology standard that involves placing an integrated circuit of some kind onto a credit card. Most European and Asian countries began adopting the technology a decade ago, pushed by regulators in those countries.
About 80 countries use smart credit cards, which allow for greater encryption and security. By comparison, only about 1 per cent of credit cards issued in the US contain such technology.
