About that new credit card in your mail

This fall millions of Americans will receive new credit cards with a silver square on the front.  While most of us will shrug and put the new card in our wallet or purse, that new “chip card” should be recognized for what it is – a giant step forward toward stopping $7 billion of credit card fraud in America.  For storeowners the “chip cards” also usher in a new era of responsibility. In October, storeowners will start to share responsibility for fraudulent purchases that occur in their stores. No longer will banks take on all of the charges. The new card and the shift in responsibility will mean a new world for us as consumers too because we can expect thieves to move into new places to steal our information, as they have done around the world.

The silver chip, known as EMV computer chip technology, prevents criminals from creating duplicates of the payment cards they steal and then sell on the black market.  The computer chip creates a unique code with every transaction. It’s something criminals have had a tough time counterfeiting ever since it was introduced in Europe and then Asia ten years ago. Of the $7 billion stolen every year in the U.S., roughly half, about $3 billion can be traced to counterfeit cards. In the UK and France, in-store credit card fraud fell by over 75 percent after the rollout of EMV chip technology and has remained consistently low ever since.   

{mosads}With eight million U.S. merchants installing equipment to accept EMV cards, 2016-2017 will be a time when experts believe fraud rates will fall in equal numbers across America. If the patterns hold consistent from Europe and Asia, however, online fraud will increase in almost equal measure because criminals don’t quit. The good news is, we are getting better at defense too.

All of the statistics being what they are about in-store and online payment card fraud, it’s a paradox that 99.9 percent of the headline-grabbing payment card data breaches we’ve seen over the past few years were entirely preventable according to an investigation done by Verizon. Most breaches involving credit card data have been neither sophisticated nor “new.” Instead, payment information data breaches often are the result of lapses in security practices. Not updating software and using default passwords to name two.

Best practices for securing data start with American companies developing a culture of security, from the boardroom to the mail room. Too many CEO’s have learned this lesson the hard way.  For corporate executives today, data security is job security. Companies that fail to make data protection an everyday priority run the risk of losing business and destroying their reputations. The good news is that we are seeing more corporate leaders than ever recognize the new world we all live in. Data security budgets and staff are increasing. That trend will likely continue for the foreseeable future.

Make no mistake, this is a fight on our soil. It’s personal. It’s persistent and it requires every one of us to do our part in defense. When we put that new EMV card in our wallet this summer, think also about changing a password, updating software patches and removing your bank login from the Post-it Note. The shift in liability has come to us all.

EMV chip technology will be arriving in a mailbox near you soon. It is a great advancement in credit card security for U.S. consumers but while it represents progress in the data security world, we must all continue to do more to stop the global criminals who attack us every single day. 

Orfei is general manager of the PCI Security Standards Council.