Proper credit card processing has long relied on two factors — having the right software to handle the transaction and hardware that has not been tampered with in any way. While the consumer does take some responsibility when it comes to using a proper card, merchants should have multiple layers of defense in place to make sure that they are not the victim of fraud.
Credit card companies can also come into play here, by making the information on their cards harder to steal. One way that this has been proposed is by adding EMV chip technology. This would allows users to simply tap a card at the cash register instead of swiping it, making it much harder for the cards to be a fake.
This is something that Visa and MasterCard have been pushing overseas, but it has yet to take hold in the United States. However, according to an article from the Associated Press, the card providers could be picking up their efforts to get chip-cards adopted in the U.S.
The issue was thrust into the national conversation following the Target breach during the holiday season that resulted in the card and personal information of 110 million consumer being compromised. Since then, the retailer has announced a plan in invest $100 million to roll out new chip card technology for its store specific "Red Card" as well as improve the POS hardware in all of its U.S. locations. The goal is that the entire system will be updated by early 2015.
Banks have also been getting involved and are looking for more pressure to be placed on merchants. There has been a push for lawmakers to make retailers more accountable for their own security in hopes of recouping more of the losses from cyber crime.
Richard Hunt, CEO of Consumer Bankers Association said that in the case of major fraud, banks are only able to collect pennies on the dollar when a retailer is involved. Even if card provides have incorporated chip technology, it means nothing if the retailer has not upgraded their their point of sale system.
"We have to improve fraud prevention across the board," he says. "There are people who get up every day across the world with one mission and that's to break credit card technology. But there's no magic pill out there. The solution involves everyone."
Ken Stasiak, the founder and CEO of SecureState, supported what Hunt said and added that chip and card technology is only one part of proper security. Just having chip cards would not have prevented the attack that affected Target several months ago. This is because the breach happened through a back end channel that did not involve the POS system at all. Instead consumer data was accessed through a third party company that monitor the retailer's climate control system.
"Chip and pin is just another security component," Stasiak told the news source. "What matters is how companies like Target use consumer information, how they protect it."
The landscape of point of sale credit card processing is changing. Even with EMV, there is still much work that needs to be done in-order for organizations to successfully support all of their solutions.