In a segment on this morning's Today Show, a spokeswoman from MasterCard led viewers to believe that new "chip" credit cards being issued to consumers are the same cards currently issued in Europe and Canada that have reduced fraud by almost 80 percent. What this spokeswoman omitted, is that the cards that have cut fraud across the globe are Chip and PIN credit cards. In the United States, banks are skipping the PIN and relying on signatures, which do not provide the added layer of security for cardholders that exists in other countries.
Retailers have spent billions upgrading their point-of-sale terminals to accept new "chip-and-PIN" cards, but banks are only taking a half-step by issuing "chip and signature" cards that are still more fraud-prone than the cards they issue everywhere else in the industrialized world.
MasterCard also insinuated that all customers will have new cards in their wallet on October 1. But an independent survey released by the AP found that only 1 in 10 consumers have been issued a new card.
Watch this segment from this morning's Today Show.
Banks and card networks have some explaining to do:
1) Why aren't new chip cards being issued with an accompanying PIN if it's the smartest and safest technology available?
2) Why, if Chip and PIN has been successful across the globe in reducing fraud, would we implement a less secure standard for American cardholders?
3) Why are banks and card networks willing to make the added investment in security in other countries but not here in the United States?
Banks and card networks continue to gloss over the fact that the cards they are issuing in the United States are inferior to the same products they offer in the rest of the industrialized world. It's time for them to honestly answer these questions.
RILA is the trade association of the world's largest and most innovative retail companies. RILA members include more than 200 retailers, product manufacturers, and service suppliers, which together account for more than $1.5 trillion in annual sales, millions of American jobs and more than 100,000 stores, manufacturing facilities and distribution centers.