Originally Posted by
iMedic
Yes, but chip and pin will essentially eliminate the skimmers, which when it comes to credit card fraud are the guys grabbing the lowest hanging fruit. I'd also imagine that up to pretty recently, skimming accounted for the bulk of fraudulently obtained account numbers.
I'd say online shopping provides even lower hanging fruit for thieves. Some places don't even ask for things like the 3-4 digit code on the back/front of the card, never mind the lack of proper security measures like applying software updates in a timely manner.
Originally Posted by
DMSFCA
On a somewhat related note, a relative works for one of the big banks managing card technology stuff. I asked him a while back why we don't go to the chip-and-pin system that is popular in Europe, it seems like a no-brainer. I'm probably going to screw up some details, but from memory:
He said there were two major challenges - the first is that the PIN is stored with the card. Your bank issues you the card and assign you a PIN. Americans are apparently terrible at remembering random numbers and to change it you have to go in with the card and do an enter-old-pin, enter-new-pin. Given how many cards are in circulation in the US they think that could turn into a logistical nightmare. I think he said that in Europe they are assigned a PIN and people there are generally better at remembering it.
The other problem (and I might not quite remember this right) is that the pin authentication isn't done at the nearest clearing house, it has to go all the way back to the issuing bank (?) and that doesn't happen instantly. He said for the big box stores and the like it could happen almost instantly but for the mom-and-pop places that don't have super fast infrastructure, this authentication process would take time and delay the POS process.
What
mia said, but in short: banks simply didn't want to spend the money when the type of fraud that would be prevented by PIN continues to drop even without it (currently ~5% of all card fraud in the US, IIRC). The rest of it is rationalization for the public.
Too bad that a lot of places aren't going to bother with things that would actually decrease fraud, like bringing a terminal to the table at restaurants.