How will Target’s data breach make credit cards more secure?
Recently 40 million credit and debit cards were stolen at Target. However, this horrible event might have a silver lining. They plan to adopt a Chip-and-Pin system for their credit cards to prevent further fraud. The magnetic strip currently used in credit cards is very easy to duplicate by thieves to create dummy cards and steal customer’s information and money.
The Chip-and-Pin system instead uses a microchip embedded in the card that is much harder to duplicate. It also uses a different card reader. Target plans to use this system on all its cards starting in early 2015. Although the credit card industry has set a deadline for October 2015 for merchants to adopt this system; merchants can still use the old system afterwards if they pay the costs from stolen cards.
Hopefully Target’s plan will make merchants familiar with the system and push them into adopting it. In the mean time, you should remember to monitor your credit regularly for any fraud and be wary about using cards for retail purchases.