NEW YORK (MainStreet) – The new, high-tech generation of credit cards calls for a contactless dip motion rather than a swipe of the plastic. That's because a small, metallic computer chip carries a unique transaction code that cannot be duplicated and can communicate with a register reader without touching it. This process may take a few minutes longer, holding you up in line for that morning Starbucks coffee, but at least you won't have to worry about credit card fraud. Right?
Not so fast. The threat of data skimming actually remains a significant one even for these advanced cards, because the method used by Europay, MasterCard, Visa (EMV) terminals to read the chip data is still similar to the method used for magnetic stripe cards, said Eran Kahana, a technology and intellectual property attorney in Greater Minneapolis-St. Paul Area.
"Thinking that EMV cards are tamper-proof helps create a false sense of security," Kahana said. "EMV cards offer no extra protection for web-based purchasing, which means users and merchants must remain vigilant as if they were using traditional magnetic stripe cards."
Josh Pauli, associate professor of cyber security at Dakota State University, agrees.
"The technology doesn't help with data breaches at all -- those will still happen," he said." But what it does provide is a much more robust solution to credit cards being re-created after being stolen."
The false sense of security is exacerbated in web-based purchasing.