Americas New Chips In Bank Cards….Banks Follow Your Money

June 15, 2015

 

US banks are currently in the process of replacing all debit and credit cards to get rid of the magnetic-strip cards and introduce new computer chipped cards that claim to more securely store data.

Experts are predicting that by October 1, 2015, tens of millions of cards will be switched out for the new chip-to-pin cards (CPCs).

After this date, retailers who do not accept CPCs may be solely liable for fraud or digital theft.

Interestingly, the CPCs will still retain the “unsafe” magnetic-strips on the back, just in case the retail outlet does not accept CPCs.

Citigroup, Bank of America (BoA) and Chase have begun the process while smaller regional banks are slowly rolling out the changes.

Processing payment corporations such as Visa, Mastercard and American Express are making the shift using fraud as their reason for altering business practices.

Susanne.Posel-Headline.News.Official- emv.chip.cards.bank.america.chase.target.home.depot.obama.american.express_occupycorporatismThe move to CPCs has been paved by retailers, bankers and those in support of moving toward a cashless society.

Last year after the Target breach, the National Retail Federation (NRF) wrote a letter to Senate Majority Leader Harry Reid and House Speaker John Boehner to implore Congress to adopt CPCs with legislative backing in order to ensure the public is protected by the federal government against hackers.

In Canada where Target uses the CPCs those outlets were not affected by the POS malware that hackers used to steal private data from millions of customers.

This ultimately led to President Obama signing an executive order to implement the BuySecure Initiative (BSI) to “provide consumers with more tools to secure their financial future by assisting victims of identity theft, improving the Government’s payment security as a customer and a provider, and accelerating the transition to stronger security technologies and the development of next-generation payment security tools.”

This EO laid out “a new policy to secure payments to and from the Federal government by applying chip and PIN technology to newly issued and existing government credit cards, as well as debit cards like Direct Express, and upgrading retail payment card terminals at Federal agency facilities to accept chip and PIN-enabled cards.”

Corporations were joined together in a “national effort to improve transaction security” by implementing CPCs in Home Depot, Walgreens and Walmart by 2015.

Leading the pack was Visa and MasterCard who combined forces to revamp payment processes and up security measures in the wake of retail data breaches.

This new super-group of credit issuers will include:

• Banking institutions
• Credit unions
• Retail corporations
• Industry trade groups

The purpose of the conglomerate is to push for the adaptation of CPCs so that activity can be monitored for customer safety.

Both MasterCard and Visa laid out an ultimatum to the public that by October 2015 all retailers must adopt this new payment system or suffer the consequences.

Ryan McInerney, president of Visa asserted: “The recent high-profile breaches have served as a catalyst for much needed collaboration between the retail and financial services industry on the issue of payment security.”

The Smart Card Alliance (SCA) believes that “chip-based payment cards and terminals” are the only way to protect customer funds.

The SCA explains that CPCs “contain embedded microprocessors that provide strong transaction security features and other application capabilities not possible with traditional magnetic stripe cards.”

Mastercard made their intentions clear in 2011 when the corporation positioned itself against cash payments in a “war on cash” which focused on markets such as India to bring the “cashless society” to reality.

Ajay Banga, chief executive officer of MasterCard Worldwide spoke at the Fletcher School about the advantages of a cashless world and outlining the “challenges of moving away from cash.”

Banga said that there probably will not be a completely pure cashless society; however under the guise of improving the current payment system, cash is not sustainable.

MasterCard was dedicated itself to a strategy that will set a standard and become influential to the future of payments. By coercing urbanized centers to the trendiness of going cashless, their influence on the behavior of consumers and their perception of being cashless can ensure that this move is made.

The focus on developing nations such as India and Nigeria are because their governments are willing to take “foreign aid” in exchange for enslaving their citizens.

Banga explained: “I absolutely think that electronic payments can be helpful. The problem is that the money has to reside somewhere… If immigrant communities find it difficult to put their money with a bank, I don’t know if they’ll do it with a cell phone provider either. The challenge is finding a way to anchor mobile payments for the future.”

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