Jerome Powell, of the Federal Reserve Bank of Kansas City, recently delivered a speech that has brought much-needed attention to the payment system in the U.S. and the need for increased safety within that system. Powell explained that, while the deployment of chip cards is a great and important step, even more needs to be done – it shouldn’t stop there.
Mr. Powell also remarked that “For many years, traditional authentication methods like signatures…have been used to verify that an individual is authorized to initiate a payment. New approaches to authentication increasingly offer greater assurance and protection. Given the current technologies that we have at our disposal, we should assess the continued use of signatures as a means of authenticating card transactions.”
After the widespread data breaches that have rocked government agencies and the private sector, it is believed that the country’s data security policies and practices are still ignoring the main problem – payment security. Many share the feeling that it is unacceptable that millions of Americans’ personal information – including credit card numbers – should be exposed as they have and continue to be.
Even though traditional credit and debit cards account for two-thirds of all the transactions that take place in the United States, it is arguable that the U.S. has the least secure verification process in the world. The other 18 members of the G20 have already upgraded to the payment card technology known as chip-and-PIN.
Thus far, the majority of the data breeches have taken place on computer networks, but a growing number of cyber attacks are now targeting restaurants, retailers and other merchants. The goal of these hackers is to steal as many consumers’ credit card information as possible. According to the Federal Reserve, their efforts have not been unsuccessful. According to them, more than 30 million fraudulent purchases occur every year.
What has been upsetting is that, among the numerous bills introduced by lawmakers on Capitol Hill, none of them include an exploration of improvements that can be made to our payment security system. In addition, big banks are turning a blind eye in deploying new technology. They have begun to issue chip-only cards, forgoing the PIN number. This means they are still relying on outdated and easily forged signatures.
The outcome of this choice has already begun to affect retailers and merchants, costing them billions of dollars in upgrades. Meanwhile, Americans are left without a PIN and vulnerable to fraud. Fortunately, Mr. Powell’s speech has begun to draw more attention to the situation. The hope is that some of the “new approaches” he speaks of will include the addition of the PIN number. According to the Federal Reserve, it would increase payment security by an astonishing 700 percent.
For now, merchants will have to safeguard their businesses payment processing until the payment situation is resolved. For businesses that struggle to secure payment processing from a traditional source, a high risk provider can offer such solutions. Whether you are in need of an adult merchant account, nutraceutical merchant account, Ecig merchant account or another high risk account, a high risk provider might be more willing to work with your business’ specific needs while also offering you safe payment processing solutions.Get Started Now