In the face of several recent major data breaches and increasing consumer concern about payment security, MasterCard is putting in place new measures to protect cardholders.
Starting in July 2014, MasterCard debit, credit, prepaid and small business cards will come with Identity Theft Resolution Assistance, a program that aids consumers who may have been victims of fraud or stolen identity. People can get help canceling cards, contacting credit bureaus, and finding out if their personal information has been shared online.
In October, MasterCard is extending its zero liability for fraud coverage to include ATM transactions and PIN-based transactions. If cardholders find charges on their statements that were not made by them or another authorized signer on the account, they will not be liable for the debt if they report it in a timely fashion. This level of zero liability fraud coverage is already included on MasterCard credit and signature debit transactions, but previously did not apply to fraud at ATMs or other PIN-based points of purchases, such as parking meters or pay-at-the-pump gas stations.
The increased security means that MasterCard customers will not be liable for fraudulent purchases whether they are made in a store, online, or at an ATM.
EMV chip technology is another step forward for fraud protection
Another step toward better data security is the adoption of EMV chip cards. EMV stands for EuroPay, MasterCard and Visa—the three founders of chip card technology. (EuroPay is now part of MasterCard.)
EMV chip cards, which are already widely used in Asia, Canada, Europe, and other countries, encrypt user data and are more secure than magnetic stripe cards. Data from each purchase can only be used once, making it hard for thieves to steal information or counterfeit cards. Countries that use EMV chip cards have lower rates of fraud.
MasterCard and Visa are also both working to switch from magnetic stripe technology to EMV chip technology. With increasing EMV card use across the United States, consumers can expect to see new payment stations and card readers in stores. Instead of swiping their cards through the payment machine, they will tap it against or insert it into a card reader to pay for purchases.