The Australian Competition and Consumer Commission has given the go-ahead for PIN-only purchases in Australia. Earlier this week, the ACCC gave its approval for Visa, MasterCard, American Express and other card providers to phase out credit card signature payments starting in 2014.
Phasing out swipe and sign credit card payments is expected to reduce credit card fraud in Australia, and is a move similar to that of other countries around the world, such as the UK, which went PIN-only in 2006.
ACCC Commissioner Dr Jill Walker said, “The ACCC notes that the card schemes and financial institutions consider that using a PIN at a point of sale is safer and faster than signing and can help protect against fraud for lost and stolen cards.”
Using the chip and PIN credit card payment method is considered to be safer than swipe and sign. The magnetic strip used to process swipe and sign purchases is much easier to replicate than a credit card chip, making it an easier target for hackers.
Copying a signature is also regarded as easier than finding out or guessing a cardholder’s PIN. By making the switch to PIN-only, Australia’s credit card providers hope to reduce fraud and make credit card payments safer.
Hackers target Target
Unlike the UK, the US has not introduced PIN-only payments. Most credit and debit card users in the States still use the swipe and sign method of payment – and after the recent Target hack, this seems to be to their detriment.
On December 19, superstore Target released a statement confirming a breach in their data security system across its US-based stores, with 40 million credit and debit card accounts affected.
Consumers who shopped at Target bricks and mortar stores between November 27 and December 15 may be at risk, with hackers stealing cardholder names, card numbers and three-digit security codes.
Without a chip and PIN system in place, this provides the thieves with sufficient information to create duplicate credit cards that can be used in stores and online.
“Target’s first priority is preserving the trust of our guests and we have moved swiftly to address this issue, so guests can shop with confidence. We regret any inconvenience this may cause,” said Gregg Steinhafel, chairman, president and chief executive officer, Target.
“We take this matter very seriously and are working with law enforcement to bring those responsible to justice.”
What to do if you think your credit card details have been stolen
With 40 million debit and credit card holders possibly affected, the Target hack has brought credit card security to the fore. However, even for those who haven’t shopped in Target, it’s important to remain vigilant for breaches in credit card security.
Debit and credit card holders should always be on the lookout for suspicious activity on their cards. This can be achieved simply by checking debit or credit card statements regularly, and reporting any fraudulent transactions to the relevant card provider.
It’s also worth bearing in mind that many fraudulent transactions involve smaller amounts. Thieves are more likely to take small amounts from a number of different accounts, than large amounts from a few accounts.
Anyone who shopped at Target between November 27 and December 15 is recommended to call their card provider. The card provider should know what course of action to take, and the card in question may well need to be replaced.
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