Preventing the Next Data Breach speaks about the new precautions companies such as Target are going to take to protect their customers from identity theft and financial fraud. After millions of people had their credit card and personal information stolen from Targets computer systems this past holiday season, evidence that companies can do a lot more to protect their customers has surfaced. One promising way retailers and banks can reduce the risk of hackers is by replacing their magnetic strips with chip-based cards. Though the switch is costly, chip-based cards are the most promising way to prevent further theft and fraud.
The attacks on Target’s database systems started when a vendor’s credentials where stolen and then used to gain access to the system. Because customers use cards with magnetic strips rather than chip-based cards, the hackers were able to collect their information from Target’s point-of-sale register. The hackers then collected all credit and debit card transactions from Target’s databases. The most viable decision would be for companies to move away from magnetic strip cards and move toward EMV chip-based cards. If banks started using cards with chips instead of magnetic strips, cards would not have to be swiped at the point-of-sale terminals. Instead, the cards would be dipped into the device and a unique PIN would be inputted to complete the transaction. By using EMV chip-based cards, the embedded microprocessors make it much more difficult to steal information.
Many companies store much more personal information then necessary when customers make transactions. Having this information stored in a clearly not so secure database, makes it easier for hackers to not only steal this information, but also potentially commit identity theft. Security experts say there was absolutely no reason for Target to have stored half of the information they did regarding their customers, specifically their four-digit personal identification numbers, or PINs, of their customers debit cards.
The chip is capable of storing and transacting data in an encrypted, tamper-proof format, protecting the cardholder from any potential security threats. This tamper-proof technology coupled with the required PIN necessary to complete any transaction is the next step to preventing fraud. By replacing the easily duplicated magnetic strips and keeping personal information to ourselves, we could drastically lower our chances of data breaches. These chip-based cards, or EMV cards, are widely used across Europe but have not yet been adopted in the US because many companies do not have the technology necessary to process this advanced way of making transactions. A point that has been greatly emphasized is that the EMV cards are not the answer to stopping fraud but just a step forward it making it much more difficult for hackers to gather or duplicate the necessary information to commit fraud.
This necessary advance in technology should be a prominent concern in all companies throughout the US. By restricting hackers ability to duplicate cards will be a very effective way to lower the amount of credit card theft in the United States. By making it safer to make transactions, companies will benefit from many customers desire to make purchases at stores with safe databases. Companies such as Target will suffer until they make the necessary changes to their databases to protect customers from the threats of online hackers.
Kulkarni, Preeti. "Will chip-based cards succeed in reducing credit card fraud?." The Economic Times. N.p., 22 July 2013. Web. 3 Feb. 2014. <http://articles.economictimes.indiatimes.com/2013-07-22/news/40727841_1_sbi-cards-chip-based-cards-emv>.
"Preventing the Next Data Breac." The New York Times. N.p., 24 Jan. 2014. Web. 3 Feb. 2014. <http://www.nytimes.com/2014/01/26/opinion/sunday/preventing-the-next-data-breach.html>.
Rogers, Kate. "Will We See Chip-Based Cards Earlier than Expected?." Fox Business. N.p., 21 Jan. 2014. Web. 3 Feb. 2014. <http://www.foxbusiness.com/personal-finance/2014/01/21/will-see-chip-based-cards-earlier-than-expected/>.