Card security: Time for an on-off switch

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Credit card security has ratcheted up as an issue all over again.

We're seeing a lot of activity these days aimed at boosting the safety of card transactions in the United States. The biggest news recently has been the move by Visa and others to promote EMV domestically, something that we thought would never happen. The planned rollout of EMV coincides with the rise of NFC systems, which has likewise promised a strong focus on security.

Indeed, as the mobile transactions war rolls on, security looms as a critical issue. Many would like to see an additional layer of security, whether represented by EMV or not, in addition to what is planned currently. Not to complicate the situation, but a key question here is whether a hardware solution is also in order.

Diebold for example has come up with a new Card Lock feature that allows users to use their mobile phones to simply turn a card on and off by sending simple text commands. When the card is turned off, transactions will not be possible. The new service is being tested by a bank that Diebold would not name, as well as the Diebold Federal Credit Union, which services employees. In a similar vein, researchers at the University of Pittsburgh have devised a security system that relies on new cards that can be turned on and off by a switch on the card itself. The card, which is optimized for NFC and RFID uses, holds the switch. That will prevent fraud by thieves who have the number.

That begs an obvious question: What about actual thieves? Wouldn't they be able to turn the card on if they stole it?

Another company, Dynamics, has pioneered a new kind of card that allows users to punch in a code via five buttons on the card itself to shut it down. It would be nice if more card issuers were to demand this sort of hard card technology. But the reality is that costs play such a huge role in these decisions that we'll not soon see adoption of new technologies. Look how long we've been forced to embrace traditional magnetic stripes. Superior EMV technology, relying in integrated circuits, has long been available but commercializing the technology has been difficult from a cost-vs. earnings perspective.

With said, the move to EMV and the rise of NFC will hopefully be enough to thwart more thieves, who have feasted on the U.S. market in recent years. -Jim