Despite Chip Based Cards, Credit Fraud Is On The Rise
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MIAMI (CBSMiami) - The use of chip-based credit cards in the U.S. was supposed to cut down on fraud and identity theft.
But the bad guys upped their game and things have gotten worse. A recent study found more than 15 million Americans had personal and financial information stolen last year. That's an increase of 16 percent from 2015.
Lane Conner, founder and CEO of credit card processor Fuze, said the chip rollout was bungled from the start, in part because it was supposed to require a pin – not just a signature.
"The real security was supposed to be the pin and actually putting your pin in when you actually dip the card," he said. "A bad guy could just as easily steal your wallet, go and dip a credit card into a machine and sign for it like they're you as you could swiping a card.
He also said the increase in e-commerce is to blame since online shopping offers virtually no credit card protection.
"Online is now the new battleground to protect consumers," said Matt Barr's with MasterCard's Digital Payments and Labs.
Barr and his team are working on creating more secure technology like tokenization, which is used in mobile wallets. It generates a unique code for each transaction, keeping a person's credit card data secret.
"It's on Apple pay. It's on Samsung pay. Android pay. It's on Master Pass. So this technology, what it means is that if someone gets their hands on that scrambled card information it's useless," said Barr.
Barr said biometrics, like thumbprints and retinal scans, will eventually replace passwords and make purchases more secure. Right now MasterCard is at work on 'identity check' or 'selfie pay' - a way to checkout using your phone's camera.
