No Swipe Credit Cards

In the land of credit card processing, there’s a new Sheriff in town. He’s called the “No Swipe” credit card. This new Sheriff can fire off a card holder’s credit info in the blink of an eye and bang! … the transaction is completed while the Sheriff gently blows the smoke off the barrel of his new six-gun. Sounds like a lot of movie hype but it’s the newest twist on the oldest debt accumulator, the credit card. But are faster, technologically advanced credit cards a good thing?

Two Sides to the Argument – Side One

According to ABC News Online, a pair of computer scientists at the University of Massachusetts went online and bought one of the radio-wave card readers the stores use. The duo collected 20 cards from colleagues and friends, and with one beep they pulled up the name, card number and expiration date on all of them. “A person could take this equipment and put it into a backpack and go to a crowded area and basically start collecting credit card numbers,” said Avi Rubin, a professor of computer science at Johns Hopkins University.

The Other Side

American Express told “Good Morning America” that its cards were protected by the “highest industry level of security”. Chase said the read range on its cards was “less than 2 inches”. And MasterCard argued that the study “does not take into account the full range of security features” built into the system.

And the Winner is …

Who is a cardholder to believe? The credit card providers see profit in their actions. By making it less time consuming to conduct a credit transaction, they increase the velocity of business for their retailers. A consumer could literally run through the department store and just flash their card with each purchase before running out to enjoy their new acquisitions. The problem is a thief could do the same thing.

Why Not?

If these new credit cards are so much more convenient than the old swipe cards, why would anyone not want one … or two, or three? Particularly in light of the fraud prevention guarantees which consumers count on when their credit card info is hijacked? The reasons, to most, are obvious. The credit cards utilize a Radio Frequency Identification Device (RFID) that puts out a weak signal which is picked up the terminal when the card gets close. The credit card’s radio signal is very weak, which requires the cardholder to get it very close to the terminal for the signal to be received. But this is where matters get complicated. Once a card holder’s card has been hijacked, the time saved by using the no-swipe is lost when cancelling and setting a whole new set of cards, cleaning up the fraudulent charges, and sending letters to the credit rating agencies to retain some semblance of the old credit rating.

Old Tech, New Application

For years, radio operators have used signal boost technology to bring in weak signals. Even at home, television pictures were improved by the addition of an electrical booster to the receiving antenna. Modern thieves use modern techniques and if they can bring along a signal booster and a radio-wave card reader, they only need to stand in a crowded elevator at a shopping mall to gather lots of credit card information without being detected.

Who Are You … Really?

More important is the fact a credit card which has been read and accepted by a radio-wave reader doesn’t verify the holder of the card as the owner of the card. It takes another step in the process to provide validation of the card’s owner being the same person as the card’s owner. There’s no viewing of the signature on the card, there’s no validation with a driver’s license or other form of identification, just a quick flip of the plastic and the cardholder is on their way … verification free. The whole idea is to make the payment part of the transaction quick, but it is in the quickness that the problems can occur.

The Ultimate Question

Given the fact that credit cards, debit cards, gift cards, and all other manifestations of plastic payment devices exist and are in greater and greater use all over the world, it is a poignant and introspective question which needs to be asked and answered before the matter reaches a conclusion. That question is, “Just because you can, should you?”