Arks
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The latest TIME Magazine has an article explaining why the US trails the rest of the world by still relying on magnetic strip credit cards rather than the more secure chip and pin system the rest of the world uses. US credit card companies lost $3.56 billion due to fraud in 2010, but they still won't spend money to upgrade us to chip and pin. The reason is cheap phone charges in the US.
In the rest of the world, telecom monopolies charged banks a fortune to check each card over the phone lines they way they're usually done in the US (due to our cheap phone calls), so they developed chip and pin, which allows merchants to authenticate transactions locally, without need for a phone call to the central computers.
We're slowly changing over, though. By 2015 merchants who don't have chip and pin readers will lose their indemnity for accepting counterfeit cards. Also, the contactless transactions (waving your card at an ATM terminal or using your phone to buy coffee at Starbucks), requires the same technology in the card, so that's pushing us to finally catch up with the rest of the world.
In the rest of the world, telecom monopolies charged banks a fortune to check each card over the phone lines they way they're usually done in the US (due to our cheap phone calls), so they developed chip and pin, which allows merchants to authenticate transactions locally, without need for a phone call to the central computers.
We're slowly changing over, though. By 2015 merchants who don't have chip and pin readers will lose their indemnity for accepting counterfeit cards. Also, the contactless transactions (waving your card at an ATM terminal or using your phone to buy coffee at Starbucks), requires the same technology in the card, so that's pushing us to finally catch up with the rest of the world.