We’re Calling The End of the Mag Stripe
Over the next few years, the mag stripe is likely to disappear from credit cards entirely. This is due to an influx of fraud on non-chip transactions and the security gap that swiped transactions leave, as evidenced by several massive data breaches famously affecting large corporations.
Most recently, it was discovered that Madison Square Garden had been hacked for an entire year and that perpetrators gained access to tens of thousands of credit card numbers before the problem was discovered.
The reason was simple. It was because the sensitive information was simple to obtain, even for a novice hacker, since Madison Square Garden concession stands were still swiping cards. They had not upgraded to EMV technology, and not having EMV is essentially laying out customers’ credit card information for hackers. EMV has the advantage of offering tokenization, which generates a unique code for each purchase and makes it far more difficult for hackers to get in.
Although it has been over a year since the liability shift, merchants have been slow to adopt EMV, with only 44% of merchants even having EMV capable equipment. Card issuers have made the transition for the most part and have sent out updated cards to their customers, but they have yet to remove the magnetized stripes on the back as many merchants are still accepting them.
The problem is that mag stripes have become an easy fallback for merchants, when in truth they work to the detriment of both the customer and merchant. Customers that are forced to swipe suffer from a lack of privacy and security of their personal information. Merchants without EMV must endure the cost of chargebacks since the liability shift.
The solution is to take mag stripes out of the equation. It would give merchants who have been slow to migrate to EMV the incentive to implement EMV or mobile payments.
However, many merchants may have trouble implementing EMV because they are using a particular POS system or setup. Fortunately, Fidelity is an expert in payment integrations and can assist merchants in setting up EMV with a wide range of software and equipment.
In a time where fraud is rampant, data security should be of prime concern to merchants everywhere. Fidelity understands this and is ready to assist merchants.
Contact us today for a consultation, and our experts will advise you on the most effective solutions for your business.