"fraud transactions are now a burden to the merchant as opposed to financial institutions."
With yet another data security breach, more card information can be compromised, but who’s to be held responsible? Kmart was hit again with a security breach because of malicious code, but who should be responsible for the cost?
The liability shift that occurred in 2015 on fraud transactions are now a burden to the merchant as opposed to financial institutions. This was a result of chip embedded cards being used instead of magnetic cards. However, USA Today reports “only 44% of retail storefronts have chip card readers embedded” (Weise). An issue thought, is that the resources (IT techs, hardware, software, etc.) needed to implement chip readers can be costly. Although touted that chip embedded cards were more secure than magnetic cards, without the technology in place, the chip is inessential. Credit Union Times reports credit unions can be affected if they include payment information for their services. According to Rebecca Harold in the CU Times, credit unions may increase the risk of credit card breaches as follows:
If credit unions do not switch from magnetic strip cards to chip cards.
Many credit union clients are small to mid-sized businesses that are still using POS and other payment systems with inadequate security information or privacy controls.
Businesses rely on the security features of their vendors who supply their equipment without actually verifying these features.
Because of these issues, the potential for loss and liability to credit unions is imminent if these types of systems and magnetic cards are still used.
"A second credit union is suing Chipotle for damages related to the fast-casual restaurant company’s recent alleged data breach."
Urrico, Roy. Breaches setting Blistering Pace, Double the Fls. CU Times. 5 June 2017. 6 June 2017.
Weise, Elizabeth. Why Our Credit Cards Keep Getting Hacked. USA Today. 5 June 2017. 6 June 2017.