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Updated Jan 17, 2013 - 3:40 pm

New technology in credit cards; security still main goal

As the United States continues its march to become a cashless society, security concerns abound.

Credit card companies constantly look for new technologies that can reduce fraud and the theft of personal information. Following are some new advances in credit card technology that could make it more difficult for thieves to steal private credit card information.

Blink Cards

The new Blink credit card looks amazingly similar to a standard credit card. Like the traditional cards, the holder's name and account number are seen on the card's front side. The familiar magnetic strip is placed on the back, so the card can be used at all locations that accept regular credit cards.

Blink cards do have an added feature inside the card that makes them more secure. There is a microchip placed inside the card that transmits information via a radio frequency. This is called an RFID chip, and when a Blink card is held close enough to a special terminal that can read RFID signals, the terminal can decipher the card holder's name and credit card number. This means that the card never has to leave the hand of the holder, and the number can't be viewed by a sales associate.

As great as this sounds, sophisticated thieves can still steal a credit card number, even if it is embedded on a chip in a Blink card. Radio frequency signals are transmitted through purses and wallets, and thieves do have access to small and portable RFID readers that can be used to scan cards while shoppers are at the mall.

The good news is that credit industry companies like Capital Processing Network are telling people about encrypting consumer information, and that means thieves not only have to steal a number, but they will have to crack a code to view it.

Display Cards

This new card looks somewhat like a credit card and calculator combined. It still has the cardholder's name and credit card number on it, but it also comes with a liquid crystal display that will let the consumer key in something called an OTP, or a one-time password that can be used for purchases that require a high authentication level. Eventually, this card will be able to store information about previous transactions and may also provide information about available cash balances. Unfortunately, this card is only available in Singapore for now.

All of this security is necessary to protect the credit card companies, the merchants and, most importantly, the consumer. Federal and state credit card laws do limit consumer liability if a credit card number is used fraudulently. Most individuals will have to pay $50 at most, and that only occurs if the theft is not reported promptly. The credit card companies and merchants must pay for the rest.

If merchants do not demand proper identification when a card is swiped, they can face charge-backs. Ultimately, however, the credit card companies do end up absorbing most losses due to fraud.

As credit card security features become more sophisticated, it will be more difficult for low-level criminals to easily steal account numbers and personal information. No security method is theft-proof, however, and business owners know that as soon as a new security technology surfaces, thieves are already attempting to figure out methods to defeat it.

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