Target's CC theft has some calling for Chip n Pin

[ccuser]

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@KeithDMA wrote:

The fact that the US hasn't gone to chip & pin doesn't make any sense to me.  Most of this credit card fraud could be eliminated if the chip & pin cards were adopted.  It's coming but it has taken far too long for this country to get on board!

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AFAIK, merchant fees for PIN-based transactions are usually much lower than for signature-based. If chip & pin becomes widely adopted in the US, credit card companies will no longer be able to provide all their generous rewards. So they will have to change their business models, and this is what they don't want to do.

[MASTERNC]

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@ccuser wrote:

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@KeithDMA wrote:

The fact that the US hasn't gone to chip & pin doesn't make any sense to me.  Most of this credit card fraud could be eliminated if the chip & pin cards were adopted.  It's coming but it has taken far too long for this country to get on board!

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AFAIK, merchant fees for PIN-based transactions are usually much lower than for signature-based. If chip & pin becomes widely adopted in the US, credit card companies will no longer be able to provide all their generous rewards. So they will have to change their business models, and this is what they don't want to do.

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I always thought the fee was based on the type of card that was used as well.  I know debit cards do have different fees, specifically, for PIN vs. signature, while credit cards have had higher fees (mainly due to the fact the bank is paying the merchant money that isn't already there). 

Given EMV will be new, I don't think we can automatically assume credit cards using a chip-and-PIN will be as cheap as a debit card with a pin.  I would think there would be a fee discount for lower theft risk but the banks will probably set fees high enough to keep these cards profitable.

[ccuser]

My understanding is that there are no such things as "debit pin" transactions and "credit pin" transactions. It's the same thing for mechant and payment system. Only the issuing bank knows if the card is actually debit or credit. Similarly, if you select "credit" after swiping a debit card, it processes like a regular credit card with a corresponding transaction fee.

Anyway, it's clear that US banks unanimously chose not to implement chip-and-pin in their cards. And those few credit union cards with chip+pin still default to signature. There are no technical or legal obstacles for implementing chip+pin, so the the most viable explanation is that it's not profitable for the banks due to lower fees.

[Open123]

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@longtimelurker wrote:But in various places, banks have taken the opportunity to use the enhanced security as a reason for liability shift. the idea being that if the transaction completed with the correct PIN, either the consumer was using the card (despite what they claim) or they were negligent and allowed someone to get hold of the PIN, perhaps by writing it on the back of the card.  This is in contrast to the existing US situation, where usually the consumer isn't liable, and the merchant or bank fight over who eats the cost.

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This is the main issue for me.  

The moment a court decides a pin # is enough proof to shift responsibility to me, I will never use it, unless US consumer laws change to reflect the new technology.  What if I was carless and lost the pin#?  Wrote it down in my safe which was broken into?  Or, evenly randomly guessed, since I used my b'day?  So, a person with 10 CCs would have to remember 10 different pins?  Or, a different one for each, as they suggest with online passwords?  Anyone really think they'll remember a unique pin for a card SD'ed from a year ago?  

PS - I do think EMV is at least a step in the right direction.  I prefer the signature, since in the case of a dispute, I'd like the Merchant to at least show me a slip with my signature, which isn't exactly easy to forge.

[john398]

In a way I am happy with the current system, if someone got my chip and pin would I be reliable for the fraud?

[Anonymous]

Unfortunately true.

[Open123]

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@Anonymous wrote:
Unfortunately true.

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Right, the moment the first person had to pay a huge amount from a lost or compromised pin (hidden camera, key logger, or just guessed), until the laws change to reflect this, no one will use it.

Would I ever agree to a contract where it stipulates that for *any* reason my pin is entered for a purchase up to my CL, I'd be fully responsible since it satisfies either the burden of proof or responsibility?  

Sure, if I still had that $100 CL BBRZ card.

[GOldfishes]

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@john398 wrote:

In a way I am happy with the current system, if someone got my chip and pin would I be reliable for the fraud?

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You may be liable, but i don't think that scenario would make you reliable

[ccnewcc]

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@Duncanrr wrote:

http://www.foxnews.com/tech/2013/12/23/weak-us-card-security-made-target-juicy-target/?intcmp=trendi...

The recent attack on Target's security system that allowed thiefs to acquire 40 million cc/debt card account's information has some people calling for Chip n Pin (not signature) on all credit cards.  I always thought that Chin n sign was kind of worthless.  Yall's thoughts?

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I would need to know more about this tech before I could formulate an opinion. From my limited knowledge, it is a cool tech and could lower fraud. But fraud and hacking is a cat a mouse game -- each opponent will constantly be patching/exploiting exploits.

My concerns are that this tech, while cool and perhaps more secure, could be the forerunner of a cashless society in which you could not buy or sell without it. But truth be told, there's no stopping that anyhow.

[john398]

I think its different now because some online merchants only take debit cards and not cc for the lower fees

*correction they offer a discount for debit cards

https://www2.allegiantair.com/popup/debit-card-discount

@ccuser wrote:

My understanding is that there are no such things as "debit pin" transactions and "credit pin" transactions. It's the same thing for mechant and payment system. Only the issuing bank knows if the card is actually debit or credit. Similarly, if you select "credit" after swiping a debit card, it processes like a regular credit card with a corresponding transaction fee.

Anyway, it's clear that US banks unanimously chose not to implement chip-and-pin in their cards. And those few credit union cards with chip+pin still default to signature. There are no technical or legal obstacles for implementing chip+pin, so the the most viable explanation is that it's not profitable for the banks due to lower fees.

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