Credit Card Security Chip Vulnerability Discovered

Credit cards with chips are supposed to be more secure, but that may not be true

Shaun Plum
MoneyTips Contributor

Borrowing Credit Cards

Credit Card Security Chip Vulnerability Discovered
August 8, 2016

Cyber security professionals have recently conducted a series of tests on credit cards with security chips. The result has many card issuers and consumers feeling less confident in the new security measure, designed to prevent hackers from stealing credit card information.

The security chip was first announced at a security conference held in Las Vegas. The concern centers around the fact that some information is not being correctly encrypted to protect it from criminals. So far, this security vulnerability is theoretical because there have been no reported cases of cyber-criminals using it. It has left card issuers and proponents of the chip system racing to find a solution before criminals begin using it to steal information.

Experts believe that this security hole can be fixed and it may not affect all retailers, but it is the latest in a line of issues with the chip system. Retailers had to absorb the cost of upgrading their credit card machines to include chip readers and then wait for card issuers to approve and activate those systems, which took longer than anticipated. For consumers, transactions with a card chip take longer than transactions with a magnetic strip and add to the time spent in checkout lines.

New software and hardware updates will address these concerns and, most expect, this new security issue.

If you would like to monitor your credit to prevent identity theft and see your credit reports and scores, check out our credit monitoring service.

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