WE USE PLASTIC to pay for everything from packs of gum to parking meters to big screen televisions. Swiping a debit or credit card has become a habit so ubiquitous as to be unnoticeable. Until thieves hijacked the payment system for Target, one of the nation's largest retailers, to steal credit and debit card information from 40 million customers, affecting nearly every Target store in the country during the busiest shopping time of year. Makes you wonder how that could happen, doesn't it? Our consumer economy allows purchases made through a swipe-box attached to a smart phone. But security generally has lagged convenience. Countries around the world have changed regulations to encourage the use of credit cards with embedded microchips that encrypt customer information, security that makes that plastic practically impregnable. Regulators in European and Asian countries began the push to convert to microchipped credit cards more than a decade ago. The United States , according to reporting from the L.A. Times, continues to use credit cards with magnetic strips: the digital-age equivalent of a cassette tape. The information on those strips easily can be stolen, turned into phony credit cards, and sold on the black market. That's why U.S. businesses remain vulnerable to hacking on the order of tens of millions of customers. The Target scam, huge as it is, ranks behind a 2007 hack of TJX Systems, which owns TJ Maxx stores, that compromised 45 million cards, and a 2009 hack of a credit card processor that resulted in data theft from 130 million cards. Clearly, it's past time for credit card issuers in the United States to move to more secure plastic. Doing so, as the L.A. Times reported, will be complicated and expensive, with "merchants, credit companies and banks reluctant to spend the big bucks it would take to convert a system with 1 billion credit cards," wrote reporter Chris O'Brien . That reluctance instead costs consumers, who must grapple with the fallout from identity theft. Three years ago the Federal Reserve instituted changes designed to provide better protection and more information to consumers from credit card companies. The Fed should update those measures to include better security for the cards themselves. Several card issuers have made steps toward issuing new microchipped cards; consumers and government would be wise to do everything they can to hasten that process.
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