In recent years, data breaches at major retailers have increased across the United States. As a way to counteract these data breaches, many U.S. credit card companies have started implementing a more secure chip-card technology called EMV (which is short for Europay, Mastercard, and Visa).
Currently, most retailers use the magnetic strips on the back of your debit or credit card to access your account information. Unfortunately, the information contained in the magnetic strips is easily accessed by hackers. In addition, the magnetic strips use the same account information for every transaction. So once your card information is stolen, it can be used over and over again.
With the new EMV technology, debit cards and credit cards are embedded with a computer chip that generates a unique authentication code for each transaction. So if your card information is ever hacked, it can’t be used again–it’s a “one-and-done” scenario.
While many developed nations moved to EMV technology years ago, U.S. retailers have previously been unwilling to shoulder the costs. Fortunately, there is good news for U.S. consumers on the horizon.
Beginning in 2015, many large retailers will switch to the new EMV technology by installing payment terminals designed to read the new chip-embedded payment cards. It may take additional time, however, for smaller retailers to adopt this latest technology.
Along with EMV, even more advanced encryption technology is being developed that will increase security for online transactions and payments made with smartphones. In fact, new mobile payment options like Apple Pay and Google Wallet could eventually make paying with plastic entirely obsolete.
In the meantime, in the wake of these data breaches, you should make it a priority to periodically review your credit card and bank account activity for suspicious charges. If you typically wait for your monthly statements to arrive in the mail, consider signing up for online access to your accounts–that way you can monitor your accounts as often as needed.
Skoda Minotti works with both consumers and business owners to mitigate fraud through our Valuation and Litigation Advisory Services and Risk Advisory Services. To learn what to do if you’re a victim of fraud, contact Frank Suponcic at 440-449-6800. For more information on protecting your business from data breaches, contact Jaike Hornreich at 813-288-8826.
Advisory Services offered through Investment Advisors, a division of ProEquities, Inc., a Registered Investment Advisor. Securities offered through ProEquities, Inc., a Registered Broker-Dealer, Member, FINRA & SIPC. Skoda Minotti is independent of ProEquities, Inc.