CREDIT CARDfraud is on the rise in the United States. In 2014 alone, nearly 32 million customers had their credit card accounts breached. While the majority ofCREDIT CARD FRAUD incidents (45 percent) were related to online or card-not-present transactions, in which thieves used stolen card numbers to make online purchases, the second most common type of fraud was related to counterfeit cards. An astounding 37 percent of fraudulent transactions were due to criminals making fake cards using real customerACCOUNT information, and then using them to make purchases.
The recent introduction of EMV, or chip-and-PIN cards, to U.S. consumers is in part designed to prevent credit card counterfeiting. Because individual transaction details, including account information, is encrypted into a one-time use code that is sent to the processor, it’s going to become more difficult for hackers and thieves to access the information that they need to make counterfeit cards. However, while chip-and-PIN cards are only just beginning to gain traction among banks, scientists remain hard at work to develop even more technology that will protect consumers and eliminate credit card fraud.
Biometrics and Credit Cards
Most of us by now are familiar with biometrics — the use of personal, unique characteristics as identifiers to grant access toSECURED areas or services. The most common type of biometrics is the finger or thumb scanner, which relies on individual fingerprints to authenticate users. Once the domain of Hollywood spy movies and top-secret government agencies, biometrics has now become an accepted part of everyday life for most people; many smartphones, for example, include biometric recognition as a means of protecting the device from unauthorized access.
Biometric technology is slowly making its way to the realm of credit cards. Last year, a Norwegian bank worked with MasterCard to develop aCREDIT CARD in which a fingerprint scan replaced the PIN in a typical chip and PIN transaction. This same technology is the cornerstone of Apple Pay, which allows customers to pay for items using their iPhones. While response to this technology has been positive overall, it has not yet reached wide acceptance due to the complexity of collecting and storing individual customer fingerprints.
And while biometrics does hold some promise for reducing fraud, it still doesn’t address the issue of counterfeitCREDIT CARDS, which will continue to be an issue as long as biometric readers are not widespread. However, nanotechnology does hold a great deal of promise when it comes to curbing counterfeiting — from credit cards to designer bags and beyond.