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U.S. credit card firms ought to adopt biometrics in order to surpass the security standards of their European counterparts rather than simply catching up, according to a report by Fedscoop.
Peters’ remarks come at a time when the chip-embedded credit cards rolling out in the U.S. fall short of the security features of credit cards in Europe.
“Chip and signature [cards] … are actually behind where the Europeans and others [are], and we’ll probably leapfrog over that technology very rapidly to get into biometrics and other kinds of security measures,” said Michigan Senator Peters, who co-founded the Senate Payments Innovation Caucus earlier this year.
Credit card firms in the U.S. have only recently been swapping out the old magnetic strip cards with new microchip-embedded cards, which creates a unique code for every transaction, ensuring that they are less susceptible to fraud.
European credit card firms have been using this same chip technology for years. However, American chip cards simply require a signature for user verification, unlike European chip cards which opt for the more secure PIN system for authorization.
Many retailers argue that chip and signature cards only partially protect consumers from fraud attacks and fail to offer any protection for lost or stolen cards.
The banking and financial services industry has defended their rollout of chip and signature cards, stating that they are more focused on combating counter card fraud.
“We’re addressing the No. 1 type of fraud — counterfeit card fraud — with the chip. The chip doesn’t require the PIN to work,” said Jason Oxman, CEO of the Electronic Transactions Association.
Financial companies, on the other hand, have expressed the possibility of adopting biometrics for authorization purposes, such as face, voice or fingerprint recognition.
“Biometrics is going to play a bigger role in payments going forward because it can be more convenient and it can be a stronger form of verification,” said Mark Nelsen, senior vice president of risk products and business intelligence at Visa.
Still, some U.S. issuers, such as the federal government, have been using cards with PINs. In compliance to an executive order last year, the General Services Administration began issuing chip and PIN charge cards to federal workers.