Restyling & Truck Accessories - May '15

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Page 27 of 64 May 2015 | Restyling & tRuck AccessoRies 25 know about chip cards are slowing the U.S. migration to the new technology by hesitating to make the switch, or simply refusing to do so. One example: An October 2014 survey by American Express found that more than a third of merchants surveyed who knew about chip cards were on the fence about the technology, or had decided not to upgrade to chip card terminals. Some 57 percent of those merchants cited the cost of chip card terminals as the reason they were on the fence or were simply going to ignore the new technology. Despite the backlash anticipated from businesses that begin getting stung for fraud this fall, the major credit card com- panies are hanging tough with their dead- line. No wonder. All of those credit goliaths have been burned by the wholesale theft of credit card data that is often measured in millions of accounts. And all of those titans have been dealing with untold num- bers of angry cardholders, many of whom know all too well that security on mag- stripe credit cards is a joke. Chip cards, by comparison, are much more secure, according to Megan Shamas, a spokesperson for EMV-Connection, a branch of the Smart Card Alliance. Specifically, chip cards produce a one- time-use cryptogram for every transaction, making it much more difficult for fraud- sters to compromise. "The creation of dynamic cryptograms for every transaction with online authenti- cation is an important feature of chip cards that provides enhanced levels of security," says Randy Vanderhoof, director of the EMV Migration Forum. Plus, if a chip card is lost or stolen, the card is also much more difficult to coun- terfeit, Shamas says. Chip cards—also known as EMV cards, an acronym for the three companies The number of issued chip cards (in the U.S.) is expected to reach 600 million by the end of 2015, says Randy Vanderhoof, director, EMV Migration Forum. restylingMag.coM May 2015 | Restyling & tRuck AccessoRies 25 who helped develop the card technology (Europay, Master- Card and Visa)—also have an extremely successful track record in Europe. Credit card fraud in the United Kingdom plummeted by 72 per- cent after chip cards were widely adopted, according to Patricia Moloney Figliola, a specialist in Internet and telecommunications policy with The Congressional Research Service, a research team employed by U.S. Congress. And Canada saw a 48-per- cent reduction in fraud after chip cards were rolled out there, Figliola says. These days, 99.9 percent of all credit card terminals in Europe are chip-enabled. And 84.7 per- cent of terminals in Canada, Latin America and the Caribbean also accept chip cards, says EMV- Connection's Shamas. In fact, the U.S. is the last major market to make the switch to chip cards, Figliola says. "This is a technology that has already been widely adopted in many markets, and has proven to significantly reduce the incidence of fraud at the physical point-of- sale," says Kim Lawrence, senior vice presi- dent, corporate initiatives for Visa. Besides intense pressure from credit card companies on chip card migration, fed-up consumers are also pounding the drum skins. A recent MasterCard study revealed that 63 percent of credit card holders want a chip card "immediately," according to Carolyn Balfany, group head of U.S. product delivery for Mastercard. And 87 percent of those surveyed said they were completely comfortable with the idea of transitioning to chip cards, she says. Major banks have also been helping wean the U.S. off fraud-vulnerable mag- stripes, issuing chip cards when the older cards expire, or when customers seek replacement cards. "Chip technology is an important tool in increasing card security, and we want our customers to have the best possible experi- ence when using their payment cards," says Titi Cole, retail products and underwriting

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