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Will EMV Help?


March 2014 – Vol: 37 No. 3
by Jamie Swedberg

Chip technology is not a card security panacea

March 19, 2014

EMV chip cardThis is bonus coverage from “Before the Breach” from the April 2014 issue of CUES’ Credit Union Management magazine.

Many industry experts recommend credit unions adopt the new EMV card standard to reduce instances of card fraud. EMV, which stands for EuroPay, MasterCard and Visa, is a global standard for integrated circuit (“chip”) smart cards that, with cryptographic algorithms and the use of a PIN, provide authentication of the card to the processing terminal and to the issuer’s host system. For the time being, at least, they’re harder to use fraudulently.

In the wake of the Target data breach, Bob Roth, managing director of payment solutions at Cornerstone Advisors, Inc., Scottsdale, Ariz., says many financial institutions may need to consider moving to the new standard faster than they had originally planned to.

It’s likely to reduce fraud—at least for the short term. But staying ahead of cyber-crime is like living in Lewis Carroll’s Wonderland. As the Red Queen says, “It takes all the running you can do to keep in the same place.”

“The fraudsters spend a lot of time figuring out ways to get through,” says Theran Colwell, director of risk management at CUES Supplier member and strategic provider CUNA Mutual Group, Madison, Wis. “Then we figure that out and then block those paths, and then they get creative again and try new ways.”

Colwell’s colleague, Senior Consultant for Risk Management Roger Nettie, agrees.

“A lot of the articles flying around the industry [are asking], ‘Should the industry be looking at other forms of payment? Should we be incorporating biometrics?’ There’s the debate on EMV technology with the chips. That’s not an answer to everything. It could help, but it won’t cure everything.”

In the end, says Georgann Smith, VP/marketing at CUES Supplier member The Members Group, Des Moines, fraud is always going to take place. You can issue an EMV card and put the very best parameters in place, but criminals will always be out there trying to outsmart you.

“What we want to be able to do is try to stay ahead of the game with our knowledge and expertise, so that we can provide consultation to our clients and they can provide protection to their cardholders,” she says.

Jamie Swedberg is a freelance writer based in Georgia.

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