How high-tech cards can stop fraud

February 25th, 2014

Do you feel safe when using your credit cards at retailers? Do you feel less safe after retailer Target reported that hackers stole the information on 40 million consumers who used their credit cards at Target stores across the country? There is some good news: CBS Minnesota recently reported that new technology could make such credit-card data breaches less common.

Smart cards on the way

As the story says, smart cards will soon be available in the United States. These cards, which store all of consumers' accounts onto one piece of plastic, rely on microchips and PINs. This makes them significantly more difficult to hack. The cards are currently widely used, successfully, in much of Europe and ought to arrive here soon.

Who’s that masked card?

There is also what is known as masked cards, which CBS Minnesota reports are already available in the United States. Whenever consumers use one of these cards, it supplies a temporary number that cashiers type in or that consumers would use while shopping online. The temporary number then disappears once a transaction is completed. This means hackers can't use it, even if they steal it.

Why the delay?

But while masked cards are more secure than traditional credit cards, they’re not as ideal as are smart cards. So what is keeping these cards from arriving in the United States? CBS Minnesota says that there is not any one reason. But many speculate that credit-card companies have yet to upgrade to the new technology that will permit them to use these high-tech cards. And until they do, consumers will have to take their chances at their local shops.