Often we ask ourselves if the world is really a more dangerous place than before, or if our perception has changed over time. When it comes to the recent credit card fraud spike or data breaches this year alone, excluding the dozens of cases over the past five years, it is clear to see that there has been a drastic increase in exposed customer information. Millions of people have been affected – most recently Dairy Queen announcing that 395 stores suffered a cyber attack and Home Depot began to see the damage caused by its hackers.
There are now reports that data stolen from that breach are being used in fraudulent transactions throughout the U.S. The goods bought vary and include electronics, prepaid cards, and groceries. The hackers or whoever they sold the information to have also been draining customer bank accounts dry. Some authorities estimate that loss due to credit card and bank fraud has reached a total of $16 billion in 2014. This is a 45 percent increase from 2013 and there are still over two months to go before 2015 rolls around.
The increase in cyber attacks that continuously up the ante was predicted early in the summer and sadly has come to fruition. To put things in perspective, the magnetic strip credit card technology used in the United States is more than 50 years old and greatly lags the credit card systems in most of Europe and parts of Asia, South America, and Africa. This is what makes Americans vulnerable to cyber attacks; however, it is our preparation to change and fortify that is actually causing the hacker onslaught.
Until 2016, the United States will be undergoing a complete overhaul of its credit card and debit system to do away with the outdated magnetic strip and install an EMV chip into every card in the country. All financial institutions and retailers will reissue brand new cards to every single cardholder and merchants have to comply with an upgrade deadline (cards are no good if you don’t have the reader to use it).
Hackers hear the ticking clock and are intensifying focused cyber attacks to get the biggest bang for their buck. With limited time and resources, hackers are trying to get what they can before the transition because the security that EMV provides will stop the fun. In the meantime, as a business owner, review your payment processor security features and look into implementing an EMV chip reader to avoid the imminent credit card fraud spike.