Fraudsters will be able to hack the technology behind chip and Pin on debit and credit cards within the next year, a top US cyber security has predicted.
Theresa Payton, a former White House Chief Information Officer, has warned that the industry needs to think about developing alternative ways to protect card transactions after experts managed to crack the technology in a test laboratory.
Easy to crack
Payton, now chief executive officer of fraud consulting firm Fortalice Solutions LLC, delivered the warning on chip and Pin vulnerability in a speech at the World Credit Union annual conference in Belfast.
In her speech she explained: "We found in the ethical hacker labs we have been able to spoof chip and PIN at the sales terminals.
"If we can do it in the lab, it is usually within a year that the bad guys can do it on a commoditised, scalable rate – so be ready and be thinking about what is after chip and Pin.
“You have got about 12 months."
Chip and Pin
Chip and Pin has been used in the UK since February 2006, but is only now being rolled out in America.
Cards with this security have a chip embedded into them which stores your details and requires a personal identification number or Pin to authorise transactions, rather than a signature which can be easily forged.
America has been slow to take up the card security due to disagreements between retailers, banks and payment processors such as Visa and MasterCard. But now it is in the process of finally adopting chip and Pin it's feared fraudulent transactions could rise rapidly.
Payton said that people should be prepared for 'card not present fraud' to go "through the roof".
Fighting bad guys
Payton is one of America's most respected authorities on internet security, data breaches and fraud mitigation.
She has also commented that international co-operation to fight online financial fraud had improved but there is still more work to do.
She said: "We need to do better at actually locking people up and shutting them down.
"It is getting better but it still has so far to go. I am angry every time one dollar ends up in a bad guy's pocket."