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Is chip-and-PIN the answer to safer credit card transactions?

A chip and pin debit console is seen on 23 February, 2006, in Manchester, England.
A chip and pin debit console is seen on 23 February, 2006, in Manchester, England.
Christopher Furlong/Getty Images

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As Target continues to investigate how the details of 40 million credit cards were stolen from their stores, attention has now turned to improved payment technology. The use of magnetic strips on the back of cards has been blamed in part for the security breach at Target. Security experts say it's time to look again at the use of chip-and-PIN. 

Financial institutions in the U.K., Canada and Hong Kong transitioned to the new system a number of years ago. Cards are no longer swiped, but inserted into a terminal. Consumers then enter their secure 4 digit PIN or sign for their purchase.

While chip-and-PIN is unable to put an end to fraud, the cost of replicating cards embedded with chip-and-PIN technology is high for criminals.  A number of credit card companies plan to roll out chip-and-PIN in the United States in the next two years.

From October 2015, Visa says it will encourage the use of the embedded cards, but stores that fail to upgrade to the new payment terminals may be liable to costs if a customer with a chip-enabled card is the victim of a security breach.  

As a consumer, do you think banks should be moving faster to implement chip-and-PIN technology? Would this make you feel safer while making financial transactions?


Mary Ann Miller, head of fraud and financial crime consulting at NICE Actimize, a provider of financial crime, risk and compliance solutions for financial institutions and government regulators