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Thread: October 2015: The End of the Swipe-and-Sign Credit Card

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    Default October 2015: The End of the Swipe-and-Sign Credit Card

    "Beginning later next year, you will stop signing those credit card receipts. Instead, you will insert your card into a slot and enter a PIN number, just like people do in much of the rest of the world. The U.S. is the last major market to still use the old-fashioned signature system, and it’s a big reason why almost half the world’s credit card fraud happens in America, despite the country being home to about a quarter of all credit card transactions." http://blogs.wsj.com/corporate-intel...n-credit-card/


    "No more black magnetic stripes; no more signing on the dotted line.... The new cards contain a microchip and require the owner to enter a PIN into a [COLOR=#007705 !important][COLOR=#007705 !important]payment[/COLOR][/COLOR] machine at checkout."
    http://www.businessinsider.com/chip-...in-2015-2014-2

    The new cards will be issued for debit and credit cards. This is Visa/ Mastercard's answer to the credit card fraud.






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    Default Re: October 2015: The End of the Swipe-and-Sign Credit Card

    I don't get how this would really reduce fraud? Debit cards use a pin and fraud happens with those too.

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    Default Re: October 2015: The End of the Swipe-and-Sign Credit Card

    Quote Originally Posted by lynn2009 View Post
    I don't get how this would really reduce fraud? Debit cards use a pin and fraud happens with those too.
    From my understanding, it is the micro chip vs the magnetic strip that helps reduce fraud. The magnetic strip is easier to copy and recreate then the micro chip.
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    Default Re: October 2015: The End of the Swipe-and-Sign Credit Card

    But how would this affect online purchases? You just enter your pin instead? I think a password would be much more effective than a pin.

    I was just talking with a friend about how credit cards and banking are outdated, a couple days ago.

    I'm also a little worried though because most debit theft is due to someone getting ahold of their pin. Wouldn't the same happen with credit cards then? Because the merchant can usually see the pin.

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    Default Re: October 2015: The End of the Swipe-and-Sign Credit Card

    Have a look at ... there's much more to the transition to CMV / EMV credit card technology than simply substituting a PIN# for a signature.

    First, the microchip in these credit cards actually holds 'balance' and 'transaction' information ... and will operate in a 'read/write' mode when the credit card is slipped into a card reader at a point of sale. This makes transactions where the credit card isn't physically present significantly more 'risky'.

    Right now, the credit card company or underwriting bank is held responsible for credit card fraud losses. When 'liability transfer' takes place under EMV/CMV, this 'loss risk' will be transferred to the merchant if the merchant's credit card processing 'security' features are less than those of the credit card company or underwriting bank. This could create a MAJOR issue for no card physically present 'online' credit card charge processing. In other words, right now the fraudulent use of a US credit card to pay for a webcam session on StreaMates ( to pick just one example ), now creates a situation where StreaMates and the camgirl still get paid while the bank takes the 'loss'. In the future, if the bank's credit card security is stronger, it could be StreaMates ... and probably the camgirl ... who must take the loss.


    (snip)"Next year's scheduled changeover to chip-and-pin debit and credit cards is expected to reduce in-store fraud, while significantly increasing fraudulent purchases online, experts say.

    Carolyn Balfany, head of MasterCard's U.S. product delivery group, told The Wall Street Journal that a key deadline, called the "liability shift," would occur October 2015. That's when retailers and banks still supporting the kind of debit- and credit-cards used today will be liable for losses resulting from fraudulent use of the cards.

    "Whenever card fraud happens, we need to determine who is liable for the costs," Balfany said. "When the liability shift happens, what will change is that if there is an incidence of card fraud, whichever party has the lesser technology will bear the liability."

    EMV cards, which have been used for years in Europe, require people to input a PIN to complete a transaction with a retailer.

    Payments cards in use today in the U.S. have a magnetic stripe for storing data, a decades old technology that hackers can easily mimic when using stolen credit-card numbers to make counterfeit cards.

    While in-store fraud with bogus cards is expected to decline, the reverse is predicted for online retailers, which won't experience any significant improvement in security with the switch to EMV cards, experts say.

    Instead of using stolen credit-card numbers at stores, criminals will intensify such activity online.

    "Fraud is much like natural phenomenon, whether that be the flow of water or electricity, in that it moves to the path of least resistance," Al Pascual, analyst for Javelin Strategy & Research, which focuses on the financial industry, said.

    While websites could require the PIN before completing a transaction, hackers could just as easily steal that data along with the card number.

    "It's uncertain to see how moving to EMV can really secure anything online at this point," said David Kennedy, founder and security consultant of TrustedSec.

    In time, the credit-card industry could develop ways to leverage the technology in EMV cards to bolster online security.

    For example, a near-field communication (NFC) reader, either built into a PC or sold as a USB accessory, could be used to authenticate the EMV card to complete an online transaction. The chip embedded in the card could also be used in making purchases through a mobile phone, many of which support NFC.

    "EMV cards do not currently offer much in the way of protection from CNP (card-not-present) fraud," Pascual said. "(But) there is talk of leveraging the NFC capabilities of mobile devices and contactless EMV cards to authenticate e-commerce and m-commerce transactions.""(snip)

    ^^^ from


    As the article points out, the 'liability transfer' away from credit card companies / underwriting banks toward merchants for 'no card physically present' transactions may result in future online credit card transactions requiring a phone call to the cardholder, a smart phone swipe of the physical credit card by the cardholder, the cardholder subscribing to a 'Mobile Wallet' service that accepts the 'liability' etc. All of these options are likely to add 'costs' and 'complications' to online credit card transactions ... and especially so for particular online businesses that have a history of high rates of fraud / chargebacks. As such, the implementation of EMV/CMV plus 'liability transfer' is likely to have negative ripple effects for camgirls. However, for physical card present customer transactions at strip clubs, EMV should be more or less 'neutral' for dancers.
    Last edited by Melonie; 02-10-2014 at 07:41 AM.

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    Default Re: October 2015: The End of the Swipe-and-Sign Credit Card

    Good information - but eventually the crooks will find a way around the chip.

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    Default Re: October 2015: The End of the Swipe-and-Sign Credit Card

    ^^^ as was pointed out in the industry 'blurb', where 'card not physically present' transactions are concerned, hackers are already in a position to scarf the card's PIN right along with the card number itself. This is why online transactions post EMV/CMV are being pushed toward an extra 'step' of verification ... calling the cardholder's 'registered' home/mobile phone for a verbal PIN#, forcing the cardholder to swipe his card past his own card reader as part of the online credit charge purchase process, etc. ... or 'offloading' the loss risk onto some sort of pre-paid Online/Mobile Wallet service where the cardholder takes the 'loss risk' rather than the merchant.

    Certain 'voices' would point out that this heavy pressure to move to EMV / CMV is at least partially motivated by 'brick and mortar' merchants who wish to make online customer purchases from competing online merchants more expensive and/or more difficult ... for the obvious purpose of recapturing market share. The consequences of 'liability transfer' to online merchants accepting 'no physical card present' transactions could certainly change this playing field.

    For example, if 1 out of 50 credit card transactions of any kind turns out to be fraudulent, right now this translates into an X percent 'processing charge' addition that is paid by ALL merchants to cover the resulting 'losses'. However, once the 'liability transfer' is put into effect, and EMV / CMV significantly reduces the instances of credit card fraud when the card is physically present, 'brick and mortar' merchant credit card processing charges should go down ... while online merchants could potentially face the outright 'loss' of the value of 1 out of 25 online sales ( basically equal to an actual theft from a 'brick and mortar' retailer's shelf ) on top of being required to pay credit card processing charges. Or put another way, EMV / CMV would put an end to a situation where 'brick and mortar' merchants are forced to subsidize the costs of higher fraud rate online merchant 'losses'.
    Last edited by Melonie; 02-10-2014 at 08:17 AM.

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    Default Re: October 2015: The End of the Swipe-and-Sign Credit Card

    The thing to keep in mind is that with these types of transactions there are three parties involved; the merchant, the bank, and Visa/MasterCard. Even though Visa and MasterCard wont be covering fraud transactions after Oct 15; American banks will.

    American Banks are required by law ie Bank Regulation E (part of the electronic funds transfer act) to cover all fraud transactions greater then $50. This deadline is an ultimatum to American Banks. Visa/Mastercard is telling banks either update or we wont be processing your fraud transactions funds back to merchants or customers.

    Banks have done countless test markets and products with the chips. But Americans have hated the micro chips in their cards. Which is ironic because they have gps in their phones. But in repeated trails customers just stopped using the devices with chips. American Banks havent changed over because they are scared of loss of business. Visa/Mastercard has now forced the issue.

    Each bank is going to handle this situation differently. I think they will phase out signature based transactions first. That way people can get used to only using PINs. Then they will send out new cards with micro chips.

    The real headache will be for merchants who have to buy new or update their payment processing equipment and software.
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    Default Re: October 2015: The End of the Swipe-and-Sign Credit Card

    ^^^ Vamp, have you heard any addiional 'inside scoop' as to how 'no physical card present' online transactions are going to be handled ?

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    Default Re: October 2015: The End of the Swipe-and-Sign Credit Card

    Nothing has been completely rolled out yet. But I would think we would copy Europe.

    Europeans have had these chip/pins, key fobes, mobile phone wallets etc for a long time. They only have magnetic stripes on their cards in case they travel to America. The magnetic stripes havent been used there for at least five years. Some countries in Europe have already phased out the use of checks.

    With some debit or credit cards in Europe you have one pin number for in person purchases and another pin for internet transactions. Others send you a notice for online transactions to your cell phone or email, you must either accept or decline the transaction for it to be processed. With America now in the market for EMV there will be alot of other options created as well.
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    Default Re: October 2015: The End of the Swipe-and-Sign Credit Card

    Why don't they just require a finger print instead? That would be HARD to fake. And for those who want to shop online, they can attach one to their computer with a USB drive.

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    Default Re: October 2015: The End of the Swipe-and-Sign Credit Card

    Quote Originally Posted by GlamourRouge View Post
    Why don't they just require a finger print instead? That would be HARD to fake. And for those who want to shop online, they can attach one to their computer with a USB drive.
    Aside from not wanting my fingerprints all over the place, they can apparently be fudged with fake gelatin fingers. The computer-attached variant could be fudged in software.

    In short, because you can change your PIN, but not your fingerprint.

    I think that the absolute best would be a display screen on the card (this is not so far-fetched!) that displays a changing code. Although I don't understand the math, I believe that this can be programmed in such a way that it can't be fudged, and thus would ensure that the physical card is available to the person putting in the order.

    So banks use fobs with such codes for logging in to one's account. Extending it to credit cards (either on the card itself, or even better, on a separate fob such as the existing ones) would probably cut fraud down WAY more than just the PIN system.

    I'm in Canada where chip-and-PIN has become the norm. Nothing with card-not-present has visibly changed.

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    Default Re: October 2015: The End of the Swipe-and-Sign Credit Card

    Nothing with card-not-present has visibly changed.
    Yes, but, what about 'invisible' changes ... and particularly the changes related to 'liability transfer' ? Right now, a webcam host accepting online customer credit card charges doesn't really care if the charge is genuine or 'bogus', since visa/MC and the underwriting bank cover potential losses immediately, and since all other businesses with credit card merchant accounts for Visa/MC eventually share the cost of the losses more or less equally ( with some difference in % processing fees charged ). After 'liability transfer', if a webcam host accepts online customer credit card charges that are 'bogus', the webcam host alone will be forced to eat 100% of the losses. This involves 'real money' ... and undoubtedly will have some trickle-down effect on camgirls.

    I don't know what the 'liability transfer' status is for Canadian and European credit card merchant accounts. Thus I don't know if they are still operating under the present US model where the cost of losses is spread out across ALL credit card merchants, or whether the individual credit card merchants have been made 100% responsible for losses resulting from 'bogus' credit card charges they have accepted. If it's the former, then this US move toward EMV could have world-wide implications.

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    Default Re: October 2015: The End of the Swipe-and-Sign Credit Card

    What you keep calling the "liability transfer" is only Visa/Mastercard's view of who is liable. Visa/Mastercard are forcing American Banks to update to the newer system.
    The American laws have not changed. The American laws are clear who has to cover fraud charges. Here is a link to Bank Regulation E from the Electronic funds transfer act to be clear. http://www.bankersonline.com/regs/205/205.html

    Nothing is changing in Europe or Canada because their systems are up to date.

    If I'm not mistaken most cam girl websites are based in Europe. Nothing about their process would change at all.

    There is nothing to be freaked out about. This is just a heads up that changes are occurring.
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    Default Re: October 2015: The End of the Swipe-and-Sign Credit Card

    from ... it would appear that Visa, MasterCard and American Express are all on a trajectory to effect a simultaneous 'liability shift' which will ( continue ) to protect merchants who invest in EMV compatible equipment to process ' card present' transactions. However, the three card companies have also left open-ended the future 'fate' of 'card NOT present' transaction liability. I don't see how Bank Regulation E is going to force Visa, MasterCard, American Express etc., or the nderwriting banks, to 'eat' future losses after 'liability shift' policy becomes an official term of service.

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    Default Re: October 2015: The End of the Swipe-and-Sign Credit Card

    Quote Originally Posted by Melonie View Post
    I don't see how Bank Regulation E is going to force Visa, MasterCard, American Express etc., or the nderwriting banks, to 'eat' future losses after 'liability shift' policy becomes an official term of service.
    Visa and Mastercard are not banks. They are transaction processors.

    The Bank is a separate entity. Regulation E is enforced by the Bank regulators. Regulation E is extremely detailed.

    Visa/Mastercard and EMV can have their own views about liability. They usually have these policies as guidelines for banks in countries without detailed transaction laws.
    But American banks have to abide by the laws and regulations handed down by our government and Fed. If banks do not abide by Regulation E they are opening themselves up for massive lawsuits from merchants and customers.

    The only thing Visa/Mastercard can do is say if the banks dont update their system by 10/1/2015, they wont process the fraud credits back to banks any longer. Which would decrease profits for the bank. They are forcing American banks to update their systems.
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    Default Re: October 2015: The End of the Swipe-and-Sign Credit Card

    ^^^ You would appear to be painting a picture where American banks ... facing elevated potential 'loss risk' from future fraudulent 'card not present' transactions ... would attempt to reduce that loss risk via other means ??? Charging higher fees to credit card merchants known to rely on a high percentage of 'card not present' transactions ??? Closing merchant accounts for credit card merchants known to have a high percentage of fraudulent credit card transactions / chargebacks ??? This would be bad for both strip clubs and webcam hosts ???

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    Default Re: October 2015: The End of the Swipe-and-Sign Credit Card

    Banks already charge higher fees, close merchant accounts, or prevents high risk businesses from getting merchant credit card account processing. That isnt anything new.

    What I am saying is that banks are going to update their cards so they are compiling with Federal Regulations and Visa/Mastercard.

    I dont see this issue effecting cam girls too much.

    The biggest problem for Strippers will be ATM machines. All ATM machines will have to be updated. Getting those updates will be costly.
    Nature knows no indecencies; man invents them. ~ Mark Twain


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