October 23, 2006

No-Swipe Credit Cards Contain High Security, Privacy Costs

Tens of millions of a new generation of credit cards -- cards whose data is relayed by radio waves without need of a signature or physical swiping through a machine -- have been issued, and equipment for their use is showing up at a growing number of locations. But in tests on 20 cards from Visa, MasterCard and American Express, the researchers here found that the cardholder’s name and other data was being transmitted without encryption and in plain text. They could skim and store the information from a card with a device the size of a couple of paperback books, which they cobbled together from readily available computer and radio components for $150.

Researchers See Privacy Pitfalls in No-Swipe Credit Cards, New York Times, October 23, 2006.