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Mullins: Smarter credit cards will be safer bet

Published:   |   Updated: January 19, 2014 at 10:08 AM

While researching the fallout from Target//’//s gigantic data breach over the past couple of weeks, I kept wondering, “Isn’t there a more secure way to use a credit card than just swiping it in a terminal and scratching out a signature the clerk never even looks at?”

Indeed, there is a more secure method — at least one that should be here soon. They’re called “Ssmart cCredit cCards.” Soon, one may show up in your mailbox, and it may make the whole process of swiping a card in a terminal seem as old fashioned as using a fax machine. Here’s how they work:

Each card will still have a magnetic strip on the back that holds your info — name, card number, etc. But the card will also have an embedded microchip inside, so thin that the plastic will remain the same thickness. At a store or restaurant, you’ll insert the card into a reader, like an ATM machine. The chip holds an encrypted set of information with your ID, the card number and lots of other data, and it connects with the terminal to confirm the card as authentic.

One version of the cards is technically called “EMV,” short for Europay, MasterCard, Visa, but I suspect we’ll just call them smart cards or chip cards.

Would this have prevented the Target hack? Perhaps not, because it looks like hackers installed a program into Target’s cash registers that directly read the computer memory. But smart credit cards are at least a step in the right direction, says Jody Farmer, vice president of CreditCards.com, because they help secure at least one more link in the chain.

“Today, it’s relatively easy for thieves to use a low-cost machine to copy the info on the magnetic strip and copy it to another card,” Farmer said. (I found scores of YouTube videos showing how, for crying out loud.) “They’ve even used them to reprogram old hotel keycards. The smart chip uses an encrypted data set to authenticate that the card is really the right one.”

The United States may be the world’s largest consumer economy, but other countries are way ahead of us on this. Years ago, Europe went to smart credit cards that actually use a PIN, too, which means three forms of ID: Magnetic strip, chip and PIN.

Travelers from the United States run into problems because their old U.S. cards don’t work in things like automated toll booths because there’s no one there to authenticate that you are really you.

Why is the U.S. so far behind? Farmer said it’s been difficult here because the rate of fraud is actually quite low — hovering around 1 percent — and banks can push their fraud liability onto merchants and card networks in the form of higher fees.

Plus, the cost to upgrade to chip-enabled terminals adds up, Farmer said. Picture a retailer with a few thousand locations, multiplied by every cash register in the chain, and you can envision the mother of all tech support projects.

But in the meantime, some banks and credit card companies are already sending smart cards to high-net-worth customers who travel a lot, and you can actually request one from your bank — typically at no extra cost because the banks essentially think, “Yeah, we’ve got a customer about to spend a boatload abroad! Give them a smart card ASAP!”

But know this: Smart cards are not the same as “wireless” credit cards, the ones with what look like a tiny WiFi logo on the back. Those came along when card companies envisioned that you would just tap your card on a terminal and wirelessly pay for your Big Mac or whatever. I won’t say that project is dead, but it’s on life support, in part because despite all the assurances from the I.T. crowd that they’re secure, people (including me) rightly or wrongly thought, “Wireless credit card? Are you kidding me?”

Copying an encrypted microchip? It’s not impossible, and it’s been done, but it’s not easy, either.

You’ll start to see the shift to new smart cards as banks and credit card companies start sending out new ones soon. Mastercard and other companies envision a total switchover by next October — including terminals at every store, gas station, movie theater, coffee shop and grocery store. We’ll see how well that plays out.

Hopefully, it’s just one of many security upgrades for credit cards. Because I think I speak for all of us shoppers when I say enough with the hacks.

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The Flying Pan restaurant opened up in Tampa last March, partly as an experiment: Would Americans flock to French-style crepes the same way they did with burritos from Chipotle? Unfortunately, they haven’t. The Flying Pan decided to close its first U.S. property at 2702 W. Kennedy Blvd., the site of the former Bin 27 restaurant that occupied the space before. The site is now for sale. Abroad, crepes are hugely popular as both a street food akin to a burrito or taquito and a universal form of wrapper for breakfast, lunch, dinner or dessert. Here, crepes have mainly been part of the gourmet chef repertoire with a name that’s not-so-easily pronounced without a French accent. But don’t count out the crepe forever. The company is rethinking its approach and may try again with drive-thru locations or food trucks.

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One trend that’s unfolding this year is a curious blend of marketing and charity that some call “conscious capitalism.” The shoe company Toms really popularized this. When you buy a pair of Toms, the company donates a pair of shoes to the needy. A marketing trifecta example of this came across my desk this week: charity, product, celebrity endorsement. The personal grooming company Kiehl’s is selling a “Midnight Recovery Concentrate” ($46), with all proceeds going to “Keep a Child Alive,” a charity co-founded by Alicia Keys that helps provide health care to kids and families affected by HIV.

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Heard of the store Boston Proper? You may soon if you’re an International Plaza shopper. The upscale retailer plans a store at the mall in the coming months. A quick glance at the website reveals a style appealing to affluent women who may or may not spend time lounging around a beach house or yacht but who want to spend less than $200 on a cocktail dress or bikini. It’s part of the Chico’s brand of stores, which includes White House/Black Market, Chico’s and Soma Intimates. Officials at I.P. and Chico’s are tight-lipped about the move, and there’s no guarantee in retail until opening day, but it’s a good bet you can expect a store to open soon, as some of the development paperwork is already underway.

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Sorry, electric car skeptics, but Tesla Motors is doing just fine. The company beat its own revenue forecasts for the fourth quarter of last year by 20 percent — with almost 6,900 vehicles sold. I’ve seen more than a few driving around Tampa Bay. Its stock is rising again, despite a couple of high-profile accidents where road debris like iron bars flipped up and punctured batteries, causing fires. Tesla points out that its cars actually contained the fires and didn’t explode like gas-powered ones often do, and their Model S just got the highest-possible safety ratings. Tesla recently opened a sales center on U.S. 301 near Brandon and has started offering test drives.

rmullins@tampatrib.com

(813) 259-7919

Twitter: @DailyDeadline

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