Our era is one marked by explosive technological growth. It seems like just as soon as you’ve figured out the latest gizmo, then it’s no longer the latest. In this way, we more often find ourselves adjacent to the next tech generation rather than astride it. And like the kid who finally got through the first Harry Potter just to find out that everyone’s into vampires now, we are often frustrated by our seeming inability to keep up with the latest trend. Credit cards, too, have a bit of a technology curve – one that we are continually learning lessons from it. Here are a few recent credit card innovations that have proved to be confounding before they were helpful.

The Internet

Ever since Al Gore invented it, the Internet has been a haven for both commerce and corruption. On the one hand, it made buying hard-to-find niche products and shameful indulgences it also made it considerably easier to rip off unsuspecting card wielders in cyberspace. As with all zeros and ones that go zipping about that proverbial series of tubes, they are prone to interception. Consumers found themselves victims of hackers, crackers and other manners of credit card hijackers to the point that NYTimes called credit card theft  a “thriving global market” in 2002. The going rate for a stolen credit card was between .40 cents and $5 (discounts for bulk rates). With Internet pirates lifting credit card numbers by the thousands from online merchants by breaking into servers, the FBI likened it to bandits robbing stagecoaches in the old west.

The problem, after all, was that your credit card numbers were just sitting there on the servers, like ripe cherries ready for the plucking. To combat this, the credit card whizzes came up with the next stop on our mini-tech tour.

The CVV Code

The idea behind the card security code (CSC) or card verification value (CVV) is that merchants can’t authorize purchases without a set of numbers printed on the back of the card (the CVV). And the law bars them from keeping CVV codes on file. While merchants can keep billing information and the credit card numbers from the front of the card on file, consumers have to enter the numbers on the back each time they made a new purchase. Annoying, a little bit, but it made lifting thousands of credit cards from a server without their corresponding CVVs somewhat of an exercise in futility. So what did the credit card thieves do to escalate? Enter: the phishing scam.

When a credit card thief steals your credit card company by extracting it from a (supposedly) secure server, that’s hacking. But when they trick you into handing them your personal information voluntarily, that’s called phishing. And now that CVV codes are no longer generated based on the credit card information, phishing is the only way to get those CVV numbers from you.  But why in the world would you do that, you ask? Obviously, you’re not stupid. So phishers pretend to be your bank, your lender or your credit card issuer or and send you emails requesting your account information for confirmation. Or they’ll send you to fake login pages that merely steal your information as soon as you enter it. All this amounted to much more spam and much more paranoia. And to this day, there isn’t any real way to stop the madness – except to be very, very careful about what click on in emails.

The Contactless Card

Next up is something that credit card companies invented not for security purposes, but, seemingly to fix a problem that didn’t exist. For those of you who were sick and tired of having to carefully align your card into that teeny tiny slot and summon the lilliputian amount of strength required to slide it downwards just in order to make a transaction, the contactless card is your messiah. Fixed with a little RFID chip, these cards have the amazing (but ultimately pointless) ability to authorize transactions just by being waved within a few inches of a card reader. The benefit: no more lines held up by klutzy butterfingers who don’t have the manual dexterity to swipe a card. The drawback: now we have to carry wallets made out of aluminum foil.

Though there have been few reports of people having their credit cards stolen by hackers with unauthorized RFID chip readers, the paranoia is not altogether unrealistic. If all it takes is a casual swipe in close proximity to get the needed information to process a credit card transaction, why couldn’t someone just wander through a crowded shopping mall waving their homemade card reader at everyone’s back pockets and handbags and reap hundreds of credit card numbers? With all the major credit card issuers offering RFID-enabled cards, the security issues certainly merit a bit of concern.

What can you do? Well, as mentioned above, you can insulate your wallet with metal, water (good luck with that one), or other credit cards (limited protection). Or you can simply avoid all RFID-enabled credit cards -but this may prove difficult as the fad spreads. But then again, the encryption technology is likely to improve as well. In the meantime, just be wary of anyone who appears to be attempting to pick up radio signals from your buttocks region.

Chip-and-PIN Cards
Meanwhile, chip-and-PIN cards have given Americans yet another reason to leave their credit cards back at home. Once touted as the safest, most convenient way to spend while traveling abroad, increased foreign transaction fees and a new security measure implemented in many European countries are quickly making cash the only alternative for travelers outside the U.S.  European credit card issuers are now putting in a special microchip into credit cards in addition to the magnetic strip. This chip is required for authentication in many automated ticket kiosks, meaning North American travelers trying to get a train ticket or rent a bicycle or make a call at payphone may be SOL with their outdated cards. Chip-and-PIN cards, which haven’t proliferated the U.S. yet, are currently common in Mexico,Brazil, Japan and most of Europe. So, credit card thieves and honest consumers whose issuers are tragically behind the times alike will have trouble making purchases in these regions in the meantime – legit or not.

What kind of inconveniences have you faced with newfangled credit card technologies? Vent in the comments section below, if you please.

photo by midnightcomm

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