Credit card industry still debating over payment technology

There has been considerable discussion in recent months over payment processing technologies, especially with regard to whether methods used by credit card companies require updating.

On one side of the debate are those who maintain that traditional credit cards, which employ magnetic strips to store account information, afford sufficient consumer privacy protection given that other protections are built into that transaction processing platform. Others, however, maintain that credit card technology is outmoded and insecure, according to a report from Credit Union Times. The report further mentions that those who believe that consumer information should be stored more securely within those credit cards often believe that the so-called "chip and pin" type of EMV payment popular overseas offers many practical upgrades. Not the least of these is that account data stored on the card is only accessible after its user enters a code, hence the nickname.

But card issuers are resistant to this type of a move because of both the cost involved in swapping out millions upon millions of credit cards, and because they say payment protections aren't lagging enough that fraud is a widespread problem, the report said. However, some of the country's largest lenders are now issuing cards that carry both the standard magnetic strip and a microchip, but only for their more affluent customers who travel abroad often. Nearly all the rest of the developed world uses EMV cards exclusively, and this is particularly true in Europe and Asia.

"EMV was developed because European card issuers needed a way to provide merchants with quick, secure authentication," Aris Jerahian, vice president of client relations for The Members Group, wrote in a recent paper on the debate, according to the site. "Europe's poor telecommunications infrastructure and a great number of unmanned terminals and kiosks made it difficult to provide this authentication with traditional mag-stripe cards. EMV, supported by chip-and-PIN technology, became the answer."

Consumers who want to better protect their finances but do not have access to EMV cards should instead turn to regularly checking their credit reports. Often, unfair markings can have a negative impact on their credit standing, and working with a credit repair company to correct these problems can help to improve their credit considerably.