MasterCard, Visa and American Express Call for Hard-to-Counterfeit Credit Cards and Tokens Replacing Account Numbers to Help Plug Breaches

Posted on February 10th, 2014 by Dan Rampe

Breach

“Once more unto the breach, dear friends, once more; Or close the wall up with our English dead!” (Shakespeare, Henry V).

Piling up English dead to stop hackers sounds a mite extreme – especially if you happen to be English. However, MasterCard, Visa and American Express are pushing for new technologies to make it more difficult for cybercriminals to exploit businesses and their customers.

MasterCard CEO Ajay Banga said merchants and payment processors have to work toward chip technology and tokenization to improve security. “We’ve got to get ahead of this as we go forward otherwise you’re going to have [more breaches like Neiman Marcus and Target]. The more often it happens, the worse it feels.”

Chris McWilton, MasterCard’s president of North American markets, wrote merchants reminding them a “liability shift” is in the works. Merchants not upgrading to a safer technology would be responsible for paying for defrauded customers.

One of those technologies, writes Christina Rexrode on marketwatch.com, is the EMV (Europay, MasterCard, Visa) chip, which is “sometimes called ‘chip and PIN’ or ‘chip technology’ [and is] supposed to be harder to copy than cards with only magnetic stripes.”

Visa’s CEO Charlie Scharf says he’s seen “a large number of the big merchants” commit to chip technology and “a number of the banks” already issuing chip cards.

Banga says, “Everyone needs to be on the bandwagon. Banks need to be there, merchants need to be there, governments are clearly there. We need to get the networks there and the acquirers there, and I think there’s a lot of progress on that front.”

Rexrode writes that “in markets where chip technology was installed, MasterCard [reported] it saw a 60% to 80% decrease in counterfeit fraud.” And, while chip technology would not have prevented a data breach like the one Target suffered, MasterCard’s Banga said chip technology would make stolen data, “much, much, much less valuable to a fraudster, because it’s tough to counterfeit the card, and it’s almost impossible to duplicate all the unique data that flows for that transaction to get approved.”

Tokenization is another safeguard that MasterCard, Visa and American Express are urging be adopted. Tokenization lets customers shop online without entering their account numbers which are replaced by other identifiers known as tokens.

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