How Safe are Chip Cards?

Ask Instead: How Accurate is One-Size-Fits-All? At MasterCard, my responsibilities include educating U.S. businesses, industry organizations and consumers on payment security. The question invariably comes up, “Well, what’s the safest?” I’ve spent a lot of time thinking how much simpler life would be if, like in grade school, there were only one right answer for the test.

But like grade school kids, we grow up, meet new people, travel, experience new cultures and learn that there is no one answer that fits everyone or every situation. Life is infinitely better and payments are infinitely more secure when there are options and solutions, not a single solution to most anything.

I recently appeared on The Today Show as part of their ongoing series, “The Hacking of America”. It surprised me that one of the other guests felt so strongly about America adopting chip-and-PIN payments. The thing is that there is no single answer to payment security. MasterCard supports payment security and takes it very seriously but we also take seriously letting customers live their lives and letting payments seamlessly fuel what we need and want to do throughout our days. There is no right answer…there are answers. This means you might sign for some transactions, enter a PIN for others and do nothing but insert your card for your cup of coffee on the way to the office. MasterCard works closely with our banks and merchants to craft solutions that make sense for our customers in every situation.

Let me back up for a minute. It’s entirely possible that you don’t spend as much time thinking about payment security as I do.

The U.S. is currently adopting new, more secure technology to protect our credit and debit cards. Called chip cards, they have embedded computer chips making it nearly impossible to create counterfeit cards. This has been proven around the world as other countries have gone to chip time and time again. October 1 marks a liability shift when the entity – be it a bank issuing a credit or debit card or a merchant with a payment terminal – with the least secure technology will be held responsible for fraud. The banks and the merchants look at their businesses, assess their risks and decide when to send out new cards and upgrade the terminals.

Any card with a chip combats counterfeit fraud. And, hands down, counterfeit is the largest type of fraud affecting the U.S. market today. If the chip card requires a PIN, it is also fighting lost and stolen card fraud as someone who finds the card you dropped on the sidewalk is not likely to guess the four-digit combination of numbers that you’ve selected.  And that’s important but it’s not the only solution or the end of the road.  MasterCard and our partners are also embracing fingerprint scan, facial recognition, iris scan and other exciting advancements as ways that consumers can uniquely and easily identify themselves.

I am committed to fighting every type of fraud and using every available tool. What I won’t do is force you to only sign your name or only enter a PIN or only scan your fingerprint. I get concerned when people proclaim that there is any one answer to address all fraud. The Trojans probably wished they had looked at that wooden horse and considered that there may be more than one way to break a siege. It’s likely the French wished they had considered options to reinforce the Maginot Line.

Only one answer means that we don’t think fraudsters are going to continue to try to crack our codes. Only one way to fight fraud keeps us from considering options and innovating, and innovating in ways that fit into your day just a little easier or a little more naturally. The U.S. is too complex a market for there to be only one right answer.