Finally, in October 2015 the much-debated Payment Networks’ Liability Shifty propagated with EuroPay, MasterCard and Visa (EMV) is coming into motion in the United States, and the US is moving towards upgrading its mobile payments security standards. It is a progressive development for financial organisations, banks, credit unions, retailers and credit card issuers and more.
Mobile payments security
Security is so much important. Retailers need to obtain new terminals that read credit cards designed with EMV computer chips. If they fail to do so, they will end up burdened with the liability for any fraudulent transactions at their stores. In this article, we will discuss and evaluate the new system, how it works and its effect on the business world. EMV basically stands for the three pioneers in the card issuing business, Europay, Mastercard and Visa. It is a standard that upgrades the security of a business transaction. Credit card companies will now issue credit cards equipped with computer chips. These chips appear as a small metallic square on the front the card.
Retailers have begun upgrading their checkouts by introducing new technology that reads the chips. Gone are the old days off swiping the magnetic strip of your credit card through the terminal. Now you will have to insert your card into the machine that will read your card, and approve your transaction.
This new system of mobile payments security prevents fraud, such that, it creates a new, unique code for each transaction, and this code cannot be used again. It does not share your card information with the retailor, instead, the EMV chip generates, a random, unique code. This system will prevent hackers to access your information. That will avoid the duplication and theft of credit card information.
How does the security system work
Now let’s take a look at how this system will work. You will have to enter a PIN and provide additional information. However, most cards require a signature rather than a PIN. Users who do use any of the above mentioned “fancy” credit cards, which approximately makes up more than half of the US population, do not worry, you will still be able to make your regular transactions provided your card is equipped with new magnetic chips. In the instance, that a retailer has not upgraded his technology with a magnetic chip reader, you will still be able to make your payment using your EMV card.
However, through the old-fashioned magnetic strip. In case, a hacker gets access to your information regarding that particular transaction, you will not be liable for the cast. The retailer will incur it. That is because he did not upgrade his technology according to the updated card-reading system. Indeed, this new upgraded system will prevent credit card fraud and theft. Maybe not entirely, but it will most certainly increase the security standards. These standarts will serve to prevent fraud and credit card hacking. However, chip technology only serves to prevent credit card fraud at terminals largely in stores and retail markets. The reason is that the EMV chip users usually frequent stores, and online markets. In the instance that you misplace your card, lose it in a public place or it is physically snatched from, the person who holds it will be able to use it.
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