From National Retail Federation (NRF).
While Congress continues to work on laws to safeguard sensitive customer information from criminal cyber attacks and data breaches, banks have slowly started rolling out new credit cards in an attempt to reduce fraud.
The problem? These new bank-issued chip and signature cards, also known as EMV cards, are not as safe as they could be.
Think of it this way. A bank won’t let customers take cash out of an ATM based on a signature alone because they know a signature isn’t secure. It takes the input of a personal identification number to authenticate that transaction.
But rather than fully upgrading the new cards with this additional layer of security, banks want consumers to continue to sign for their purchases instead of using a secret PIN that is only known to them — meaning criminals can still forge signatures and commit fraud with the “new” cards just like they do today.
It makes the conversation surrounding banks’ billion dollar transition to these “new” cards a bit puzzling. Will the new cards and system really be safer? Are retailers required to accept the new chip cards beginning October 1?
These are important questions in a serious discussion about what every business that handles credit cards needs to ask. NRF Senior Vice President and General Counsel Mallory Duncan answers these questions and more in a short video interview.
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