The Party with the Least Advanced and Most Vulnerable Technology Will Pay

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By: Cindy Wendland

Credit card breaches at Target, Neiman Marcus, and Michaels have made the public concerned. Data breaches at eBay raise this concern even higher. Visa and MasterCard are now pushing for higher data security and one way to accomplish this is through microchips.

Say goodbye to black magnetic strips, and say hello to microchips on credit cards. This move eliminates the need to transfer the credit card number in the transaction and instead transfer only a one-time code from the card to the register. This will work well for in-store purchases, but online purchases will still have the same vulnerability. At least progress is being made.

On the financial side, costs are becoming too high with these huge data breaches. Not surprisingly, there is a liability shift coming in October of 2015. If a data breach occurs and the bank has updated to chip technology, but the retailer involved hasn't, the retailer will be liable for the costs. Many retailers already have the new technology in place. Once the banks start issuing chip cards, the retailers will activate their new systems. In some cases, the retailers will need to install new registers. The banks will need to switch out their ATM machines to handle the new cards.

Transferring data is big business, and the security involved in protecting those transfers may create opportunities. Visa and MasterCard are worried that people will use other methods to pay if data breaches become too commonplace. The other possibility that could happen is some other radical technology will be developed that is more secure. That will be great to see.

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About the Author

Cindy Wendland has a background in marketing and finance. She is the creative director for an online men's health magazine, BrainBrawnBody.com, and she gets to write their leisure/travel blog. She is also a web designer helping her clients with online community engagement, websitesbywendland.com. Prior to her web years, she worked in pharmacy consulting.

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