Burning Question: Why Are ATM Cards Still So Vulnerable to Fraud?

(From WIRED Magazine, Issue 19.03)

It’s a local news chestnut: Crooks are stealing debit card PINs from ATMs and gas pumps! Your card could be next! But in these days of complex fraud-alert algorithms, RFID scanners, and embedded chips, shouldn’t we be hearing this story less often? Why aren’t ATM-debit cards more secure?

Well, they are secure. Just not in the US. When our current card-reader infrastructure was installed in the 1980s, we already had a robust telecom system that allowed for fast communications between machines and banks. As a result, our cards could be low tech. In Europe, however, lack of connectivity created time lags that made it easy for crooks to commit fraudulent transactions without anyone noticing. So in the 1990s, European countries began upgrading their hardware to support cards with chips that told the machines, “I’m legit!” They leapfrogged us. So did criminal technology. Now we’re the world’s debit-card backwater.