Obama unveils new measures to stem identity theft

US President Barack Obama on Friday ordered "pin and chip" security measures for government payment systems, aiming to stem the proliferation of credit card fraud and identity theft.

The president signed an executive order which adds an extra layer of protection for US government cards and payment terminals, at a time when the financial industry is moving in the same direction.

"More than 100 million Americans had information that was compromised in in some of our largest companies. And is now America's fastest-growing crime," Obama said as he signed the order.

"The idea that somebody halfway around the world could run up thousands of dollars in charges in your name just because they stole your number, or because you swiped your card at the wrong place in the wrong time, that's infuriating. For victims, it's heartbreaking. And as a country, we've got to do more to stop it."

The order puts government payments in a more secure system that have cut fraud in other countries. Embedding a chip makes it far more difficult to produce a counterfeit card than one with a magnetic stripe, and a personal identification code adds additional security.

"We know this technology works," Obama said. "When Britain switched to a chip-and-pin system, they cut fraud in stores by 70 percent."

The shift in the US has been slow because retailers, banks and payment processors all need to upgrade their technology. But the change has accelerated following disclosures of high-profile breaches of payment systems at retailers including Target, Home Depot and Kmart.

At least 47 percent of US merchant terminals will be enabled for by the end of 2015, according to the Payments Security Task Force which includes major banks and retailers, along with payment processing firms like Visa and MasterCard.

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Citation: Obama unveils new measures to stem identity theft (2014, October 17) retrieved 22 September 2019 from https://phys.org/news/2014-10-obama-unveils-stem-identity-theft.html
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Oct 17, 2014
Nice the see the US is getting ready to join the rest of the world on chip and PIN cards. There is more than just extra security to the system for international travellers. Parts of the world now only accept chip and PIN cards which can make life difficult when you don't have one.

Credit card companies are not entirely aiming for better security in every situation. Both Visa and Mastercard have contactless cards that only need to be brought near the point of sale reader and do not require a PIN or signature. While only used for transactions under $100, it has meant that more than 95% of my credit card transactions do not involve a PIN now. More convenient but much less secure.

Oct 18, 2014
For the retailers involved, there should be some sort of promotion, like decals on windows and front doors, that they employ smart card technology and thus customers can feel that much safer shopping in their stores.

It would be cool if this technology could also be employed for Internet based transactions. Existing USB smart card readers, for instance, aren't that expensive.

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