Beware of Payment Card Fraudsters

by | Tuesday, March 20, 2012 8:54:00 AM | 0 comment(s)

Canadian payment card fraudsters are expected to turn to the United States to steal card data, because magnetic stripe cards are still prevalent there while almost all Canadian cards are embedded with secure chip technology. "Once 100 percent of Canadian cards and devices are chip-enabled the only opportunity for a criminal is perhaps to get that magnetic stripe and go south of the border to Buffalo [New York] or whatever and perpetrate some fraud there," says MasterCard Worldwide's Oliver Manahan.

Still, he maintains that bringing a Canadian card to a magnetic stripe-only terminal in the United States would arouse suspicion. Manahan also sees promise in MasterCard's recent endorsement of chip technology in the United States, but Gartner analyst Avivah Litan points out that "it's too much of a wild west in the U.S. There's like 8,000 banks and millions of merchants." Litan also notes that card payment infrastructure upgrade costs are enormous, but she acknowledges that the United States lags the rest of the world in terms of chip technology implementation.

Manahan cites the tremendous security offered by chip technology compared to magstripe, noting that a criminal needs "to steal that card or find a lost card somewhere" to perpetrate fraud. He also notes that although cracking the chip technology is possible, the impracticality of it is likely to deter criminals from attempting to do so.
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