Mar 5, 2007

Are US banks thinking about chip technology to fight fraud?

An article in the Boston Globe suggests that rising credit and debit card fraud and identity theft could be causing US financial institutions to move towards the same highly secure chip technology that is being roled out everywhere else.

The article quotes TowerGroup's Managing Director, Ted Iacobuzio, who says there has never been a business case for using chips in the US before, but the business case that's emerging is fraud.

Another reason why US companies are moving toward a more secure card are recent federal guidelines that encourage banks to use biometric factors like fingerprints or voice patterns to improve the security of customers shopping online or using automated teller machines. Chips would be needed for their capacity to store the biometric information.

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