Fraud is headed online to card-not-present transactions, right?
Sure, but hackers have figured out ways to get around more secure chip card transactions at the point of sale, too. Simply put, “magstripe backward compatibility” is a problem.
We’ve all had the experience dozens of times by now: the POS doesn’t have the software for EMV transactions, or some similar excuse, so our cards must be swiped the old-fashioned way.
The video below shows a device that can force a POS to accept a magstripe transaction, and magstripe transactions are easily spoofed. Take a look at the device in the video, and pity the poor cashier dealing with Loop Pay (now part of Samsung Pay), as well as Coin and the recently shuttered Stratos card. Then add watches and who-knows-what-other-wearables and it’s easy to see that the proliferation of payments devices could become a serious fraud problem for the retail industry.
The video, uploaded Nov. 24, was pointed out on a Reddit forum dedicated to griping about various annoyances, one of them being the confusing period of swipe-or-dip we’re all suffering through in the U.S. these days.
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