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September 14 2015

Technological Innovation Continues

Carrie L. Lukas

IWF writes frequently about how technology helps women.  I’m a great example of technologies many benefits:  I work for a U.S. company in spite of living in Berlin, Germany, and from home rather than going to an office.  I keep in touch with friends and family over video, and my kids have access to English-language educational programs instantly online.  Online shopping makes it easy for someone like me, with poor native language skills, to get what I need.

The good news is that technological innovation continues, and is solving problems and making our lives richer.   Over the next month, retailers through the United States are undergoing a major shift in the technology that’s used to process payments.  Rather than the traditional credit cards we’ve all been accustomed to, the United States is moving toward the technology that has long been in place in much of Europe, which is known as EMV technology or chip cards.  New cards will have a small microchip in them, and can be paired with a PIN code (like what we use for our ATM cards) to help prevent fraud.

This may not seem like a big deal for consumers:  We will all just have a new card in our purses. 

Yet this actual can have an impact on people’s budgets.  Right now the United States has a significant problem with credit card fraud (we account for about 25 percent of the world’s credit card transactions but 50% of the fraud). The costs of that fraud are borne by all of us, in the form of high prices and fees. If these cards succeed in reducing the rate of theft and fraud, then we will all be better off financially.  Unfortunately, many cards are not going to require—at least at first—the use of a PIN code. The cards will still rely on signatures as a second form of verification which will leave vulnerabilities since signatures can be easily forged. If the U.S. is going to embrace the protections of chip-equipped cards, they should pair them with PINs like other countries which have used chip and PIN cards to reduce fraud significantly.

This is technological progress at its best.

 

 

 

 

 

 

Independent Women’s Forum’s mission is to improve the lives of Americans by increasing the number of women who value free markets and personal liberty. Sister organization of Independent Women’s Voice.
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