EMV chip cards will boost defense against stolen cardholder information, but the U.S. is adopting the less secure chip and signature method of authorizing purchases.
Chip and PIN vs. Chip and Signature
The EMV chip adds dynamic data, making each transaction unique and difficult to duplicate. It’s more secure than the old magnetic stripe, but the way customers okay their purchases can add even more protection. Using the EMV chip and PIN is an added layer of security because even if a lost or stolen card is used, the person posing as the legitimate card owner would not be able to authorize a transaction. Cardholder signatures are easy to forge, and most cashiers do not crosscheck receipt signatures with driver’s licenses or other identification signatures.
Why would card companies choose chip and signature?
American consumers and retailers are familiar with PINs and want the added security a 4-digit code provides, so why would credit card companies choose chip and signature? Seth Rosenblatt from CNET noted that the answer may be: credit card companies don’t want to change too much and overwhelm consumers. Since it is a huge transition, card issuers want EMV to be as simple as possible. Many credit card companies are marketing the chip and signature as the easier method of authorizing transactions because cardholders don’t need to memorize a PIN.
PIN security is only useful when cards are lost or stolen. This is less common than counterfeit card fraud, which is a valid argument for chip and signature advocates. U.S. will eventually implement chip and PIN, possibly in 2018 when cardholders are more familiar with ‘dipping’ their new EMV chip cards instead of swiping.
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