Consumer spending patterns have been very volatile throughout history, which reflects the many ups and downs in the economy of the United States of America since the 18th century. After World War I and then again after World War II, there was a great culture shock where many goods once considered luxuries became necessities of the American people. The economy was booming again and providing US citizens with potentially unlimited opportunity. The United States of America has the fundamental root of materialism embedded in its culture, and the introduction of credit cards revolutionized the way consumers could fulfill the “American Dream.”
History of Credit Cards in America
The concept of credit has been around for centuries; however the history …show more content…
Magnetic strip cards have vulnerabilities in the authentication process. Magnetic strips use a static technology for their verification codes, which means that it is always the same, and can be easily exploited in many different ways. A new technology founded in the mid-1990s has provided a potential for an extreme reduction in fraudulent cases. Credit card companies have started to introduce the technology of an embedded chip (EMV chip technology) inside of the card. The EMV chip system augments the old magnetic strip cards with a chip that can authenticate a transaction using cryptography (Anderson, R. & Murdoch, S., 24). A computer chip card has the capability to protect sensitive data through encryption, it can authenticate messages that it receives, and can also send more reliable messages to the issuers for an authentication process (Sullivan, R., …show more content…
Although credit card fraud is a small percentage of the total $3.9 billion value, it accounts for an estimated $3.4 billion in losses for credit card companies, banks and merchants (Sullivan, R., 60). Major card companies (Discover, MasterCard, Visa, and American Express) have announced that they are planning on releasing a chip technology card in the United States. These card brands have also lobbied for changes in the shift of liability of fraudulent payments. The liability will be shifted to the issuer/processor/merchant that provides the least security when dealing with credit cards (Sullivan, R.,
History of Credit Cards in America
The concept of credit has been around for centuries; however the history …show more content…
Magnetic strip cards have vulnerabilities in the authentication process. Magnetic strips use a static technology for their verification codes, which means that it is always the same, and can be easily exploited in many different ways. A new technology founded in the mid-1990s has provided a potential for an extreme reduction in fraudulent cases. Credit card companies have started to introduce the technology of an embedded chip (EMV chip technology) inside of the card. The EMV chip system augments the old magnetic strip cards with a chip that can authenticate a transaction using cryptography (Anderson, R. & Murdoch, S., 24). A computer chip card has the capability to protect sensitive data through encryption, it can authenticate messages that it receives, and can also send more reliable messages to the issuers for an authentication process (Sullivan, R., …show more content…
Although credit card fraud is a small percentage of the total $3.9 billion value, it accounts for an estimated $3.4 billion in losses for credit card companies, banks and merchants (Sullivan, R., 60). Major card companies (Discover, MasterCard, Visa, and American Express) have announced that they are planning on releasing a chip technology card in the United States. These card brands have also lobbied for changes in the shift of liability of fraudulent payments. The liability will be shifted to the issuer/processor/merchant that provides the least security when dealing with credit cards (Sullivan, R.,