[2014-08-01] Square.com - New U.S. Bank/Credit Card Requirements (EMV)

[colinistheman]

Just today, Square sent me this:

https://blog.squareup.com/townsquare/posts/emv

Bitcoin solves all these problems because there is no identity theft and no new card reader required!

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Quotes from the link:

"Why the changeover? Here’s a crazy statistic: Almost half of the world’s credit card fraud now happens in the United States—even though only a quarter of all credit card transactions happen here. The banks want to rein this in ASAP by moving away from magnetic-stripe cards, which are much easier to counterfeit. The recent Target and Neiman Marcus security breaches also added motivation.

So how exactly will this affect your business? For starters, you’ll need a new processing device to read the information in the chip cards. This can get expensive. And come October 2015, businesses that don’t have an EMV processing device could be on the hook for fraudulent chip card transactions.

Will migrating my business to EMV cost me an arm and a leg?
Here's where Square comes in. We’re building an EMV-compliant reader that’s incredibly affordable and easy to use. We’re also working on several solutions for our Square Stand customers. You can sign up here to be notified when our EMV-enabled chip card readers are ready

What’s the deal with this "liability shift”?
Here’s the lowdown: Currently, if you run a fraudulent card, banks absorb the costs. Starting in October 2015, if someone pays with a fraudulent chip card, and you’re not set up with an EMV card reader, the banks will no longer be liable. So say, for example, a fraudster buys $30 worth of hot sauce from a restaurant with a counterfeit EMV chip card. If the restaurant doesn’t have a chip card reader to process the transaction, it could be on the hook for the $30.

Is this completely new technology?
Nope. Most of the world, including Europe, has been using chip cards for years. The United States is actually the last major market still using magnetic-stripe-only cards.

Will Square still offer the current Square Reader after October 2015?
You’ll still be able to get our current reader while the nationwide transition to EMV technology is underway. Based on chip card rollouts in other countries, we estimate it’ll take roughly three to five years for mass adoption. (Old habits die hard.) But getting an EMV-enabled device is a good thing to start considering. The sooner you’re set up, the sooner your business will be better protected."

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All in all, look how complicated and expensive it is. New cards required, new readers required, probably higher fees too.

This is USA's response to the recent Target credit card thefts-- They are adopting a new, more expensive technology.

Talk about living in the past.

Get with the new digital cryptocurrency revolution!

[runam0k]

TBH, I'm amazed the US doesn't do chip and pin yet.

[colinistheman]

TBH, I'm amazed the US doesn't do chip and pin yet.

Is it effective or good?

[howardb]

TBH, I'm amazed the US doesn't do chip and pin yet.

Is it effective or good?

It's of no benefit at all to consumer, it just reduces fraud caused by people cloning your card from it's magnetic stripe. For online sales it operates the same. It's been used on European continent for decades now. USA switches to Chip and Pin twenty years late and just in time for Europe to switch to bitcoin

[BTCGigs]

It looks like the EMV card is already/has been vulnerable to the Pre-Play attack. If the U.S is one of the only nations to not use this card and have the most fraud of credit cards, I think the fraudsters in the U.S. will simply change their tactics. So Bitcoin BTC is still a way more secure payment method imo.

[seriouscoin]

Gosh they keep trying to fix the broken wagon...... 

[Carlton Banks]

I expect chip and PIN readers with a USB interface for home use will make an appearance on the market at some point (or maybe they will appear right at the point where the debit/credit card system is near enough a lost cause). Only reason they've not done it up to now? It would make merchants wonder what exactly it is they're paying for when it comes to their own card readers (the card companies charge a huge amount for both the hardware and also for access to the network, which is mostly routed over the internet these days anyway). Some merchants are probably wise to this already (they definitely know it's expensive, even if they don't know it's extortionate)

[No_2]

TBH, I'm amazed the US doesn't do chip and pin yet.

Is it effective or good?

Chip and PIN is good for the bank: it allows them to allocate blame to the customer if a card is used without the customer's permission. Here in the UK several of my friends have had their card and PIN taken and used and in most cases the banks have refused to replace the stolen funds. There are several ways a good thief can get a user's PIN without them realising but generally a careful user can keep this secret.

Chip and PIN is has been tested in the UK for the last decade and a half and I believe parts of Europe with a plan to roll it out globally eventually. The banking industry takes ages to innovate though, the chip and PIN design has been around for at least 50 years since about the mid 1960sand still has yet to make an appearance in some developed countries. See this BBC item on it from the time:

http://www.bbc.co.uk/archive/tomorrowsworld/8012.shtml

Chip and PIN is actually quite an antiquated system that uses no form of cryptography to protect the user at the point of sale: cards can be skimmed easily as there is an unencrypted bit on the magnetic strip that tells the card reader if it's a magnetic card only or has a chip too. Meaning malicious users can replicate a card, set that bit to '0' and then sign fraudulently to make purchases. I think the rate of technology progress in the banking sector only highlights how incumbent the industry has become.

[Bit_Happy]

Is Chip and PIN the same as "smart cards" or are they different?
Googling now....

Edit:
"...chip-and-PIN smart credit card technology..."
OK, I heard about "smart cards" ~10 years ago, so I should get up to speed on what they do now....

[Aswan]

First they want credit card adoption and therefore absorb the costs of fraudulent transactions. Then, once mass adoption happened, they no longer offer that service but people are already stuck with card and with the way they do transactions....

It's like drugs. The first one is free and then once you cannot live without, they ramp up the price... I didn't expect anything else tho...

[Kprawn]

Well they giving credit cards with huge limits to students, who will never be able to pay it back or who have no assets to be sold to buy off their debt.

Will we have a situation soon, where BTC credit cards sales would be 20 000 000 coins and the available coins will be 16 000 000? 

Still cannot believe they pushing a dead donkey.   

[handmade in CTA]

Fraud goes on even with EMV. Of course this will help but will not eliminate fraud.