#Visa credit card hack 2014 plus

Each magstripe has three tracks of information, explains payments-security expert Jeremy Gumbley, the chief technology officer of CreditCall, an electronic-payments company. That leaves American retailers pretty much alone the world over in relying on magstripe technology to charge purchasesвЂ“and leaves consumers vulnerable. Card issuers have so far calculated that absorbing the liability for even big hacks like the Target one is still cheaper than replacing all that plastic. With 44% of that in the U.S., American credit-card fraud amounts to about $5.5 billion annually.

Then consider that thereвЂ™s an estimated $12.4 billion in card fraud on a global basis, says Robertson. Multiply $3 by the more than 5 billion magstripe credit and prepaid cards in circulation in the U.S. (Once large issuers convert en masse, the chip costs should drop.) Why havenвЂ™t big banks adopted the more secure technology? When it comes to mailing out new credit cards, itвЂ™s all about relative costs, says David Robertson, who runs the Nilson Report, an industry newsletter: вЂњThe cost of the card, putting the sticker on it, coding the account number and expiration date, embossing it, the little mailerвЂ“fully loaded, you are in the dollar range.вЂќ A chip-and-PIN card currently costs closer to $3, says Robertson, because of the price of chips. (Online purchases can be made by setting up a separate transaction code.) If a purchaser fails to punch in the correct PIN at the checkout, the transaction gets rejected.

#Visa credit card hack 2014 plus

While American credit cards use the 40-year-old magstripe technology to process transactions, much of the rest of the world uses smarter cards with a technology called EMV (short for Europay, MasterCard, Visa) that employs a chip embedded in the card plus a customer PIN to authenticate every transaction on the spot. The fix is a security technology used heavily outside the U.S. The solution could cost as little as $2 extra for every piece of plastic issued. Not long after, the stolen data was showing up on counterfeit cards and being used for online purchases. Hackers then sold the data to a second group of criminals operating in shadowy corners of the web. In several recent incidents, hackers have been able to scoop up massive troves of credit-, debit- or prepaid-card numbers using malware inserted surreptitiously into the retailersвЂ™ point-of-sale systemвЂ“the checkout registers. Swipe is the operative word: cards are increasingly vulnerable to attacks when you make purchases in a store. More than 100 million accounts at Target, Neiman Marcus and Michaels stores were affected in some way during the most recent attacks, starting last November. ThatвЂ™s why 2014 is shaping up as a major showdown: banks, law enforcement and technology companies are all trying to thwart a network of hackers who are succeeding in swiping account numbers, names, email addresses and other crucial data used in identity theft.

And theyвЂ™ve been working hard to break in. A thin magnetic stripe is all that stands between your credit-card information and the bad guys.