Fingerprint I.D. isn’t just for smartphones any longer. A new, ultra-thin version of the Europay, MasterCard and Visa technology has been developed and will be embedded in credit cards and debit cards soon. Credit card fraud is on the rise and affects nearly 32 million Americans annually; EMV aims to combat this problem as well as I.D. theft.
Here are the details on what this new technology means for you and your wallet.
Credit Card Fraud Costs Americans $8 Billion Each Year
Credit card fraud has increased for the fourth year in a row; this type of crime rose to $16.3 billion worldwide in 2014, according to a 2015 Nilson Report, the top trade newsletter covering the card and mobile payment industries. Nearly 8 billion of that fraud was committed against U.S. cardholders, despite the fact that Americans accounted for less than 22 percent of the volume. In other words, fraud is worst against Americans.
Credit card theft can be as simple as a thief digging through your trash to find credit card statements with your account number, or as sophisticated as high-tech hackers attacking a company that has your credit card on file. Other forms of credit card fraud include lost or stolen credit cards being used before they are reported, and skimming, in which a fraudulent card skimmer is passed off as a regular payment device that unknowing victims use to swipe their card — and the skimmer then saves and stores card information to be used fraudulently.
Perhaps the boldest instances of credit card fraud are those committed by criminals who call or email with offers of free trips or vacation packages. Unknowing victims are tricked into providing their credit card information in order to secure a false reservation — and enabling the criminals to use that information to make fraudulent charges.
Crimes like these are why fighting credit card fraud is like fighting a multi-front war; and in many respects, it’s a war the payments industry is currently losing, said Chaya Hendrick, president and CEO of SmartMetric, a developer of biometric security devices like its new fingerprint verification for credit cards. “We just saw projections that credit card fraud will exceed $35 billion in 2020,” Hendrick said. Hendrick believes the SmartMetric technology could help bring that number down.
How SmartMetric’s Fingerprint Technology Could Help Prevent Credit Card Fraud
Here’s how SmartMetric’s biometric technology works in a credit or ATM card: A tiny scanner will be embedded inside the card. When you get your card there will be a little bit of plastic over the scanner. You peel off the plastic and swipe your finger — you can choose which finger or thumb you’d like to use — three times over the sensor, forever embedding your fingerprint inside the card. “Nobody else will be able to use it,” said Hendrick.
Then, when you want to use an ATM or make a purchase, you pull your card out and swipe your finger across the sensor to activate the card for a transaction. Hendrick said this does not replace the new EMV chip technology, but adds a layer of I.D. theft protection for credit card holders.
“It means that your credit card is a dead piece of plastic until it’s activated by your biometrics,” said Hendrick. Using the SmartMetric technology doesn’t require any changes in retailers’ equipment.
Fingerprint scanners have been around for a while, but, until now, the components have not been small enough to work inside a credit card, said Hendrick. Because SmartMetric could not use any off-the-shelf components, it took 10 years to miniaturize and perfect the technology, Hendrick said.
The SmartMetric CEO said her company is currently in talks with some of the world’s biggest credit card-issuing banks and financial institutions. And although confidentiality agreements bar her from giving details, Hendrick said that consumers could see these credit cards rolling out in the next six months or even sooner.
Although this technology will not stop all credit card and ATM card fraud, Hendrick said she expects it to have a huge impact and be another battle won in the war against credit card fraudsters.
“It helps the consumer in knowing that if their card is stolen, no one will be able to use it,” Hendrick said. “And it also will stop the unauthorized swiping of your card by nefarious people.”
The Bottom Line and What You Can Do Now
You might not have experienced it, but credit card fraud is a real and growing problem. And although SmartMetric’s biometric solution might be a strong weapon in the fight against fraudulent credit card use, it won’t completely stop it. Here are a few things you can do now to ensure you’re not one of the millions of Americans who fall victim to credit card fraud every year:
- Never give your credit card number to anyone who emails or calls you if you did not instigate the contact.
- Don’t carry your credit cards in your wallet or purse. This can minimize your losses if someone steals your wallet or purse.
- Bring only the card you need for a particular outing.
- Draw a line through any blank spaces above the total on a receipt.
- Save your receipts so you can compare them with your statement.
- Report any questionable charges to the card issuer.
- Notify your card issuer if you will be traveling, along with where you plan to visit.
Combined with a little common sense, taking these precautions can reduce your risk for fraud. But if your card is lost or stolen, report it immediately. By law, you will not be responsible for any fraudulent charges made after you report your card lost or stolen. Remember, until your fingerprint can make your credit card a dead piece of plastic when out of your hands, precaution might be your best defense.