MasterCard President on implementing chip technology

MasterCard North America President Craig Vosburg on the rise in Americans' credit card debt and efforts to implement credit card chip technology in the U.S.

Credit Cards: From the Strip to the Chip

By Innovation

With America’s credit card debt on pace to surpass $1 trillion, MasterCard (MA) North America President Craig Vosburg is weighing in on worries over this development.

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“MasterCard is a payments network, we don’t issue cards, we don’t lend to consumers, our bank partners do that and as far as we see they’re doing a very good job of managing consumers and managing credit that they’re extending to consumers,” Vosburg told the FOX Business Network’s Maria Bartiromo.

On whether it concerns him that consumers are borrowing more, Vosburg said, “I don’t necessarily see that as being a particular concern at this point but again we’re seeing nice growth in spending activity, we’re seeing good, moderate, but increasing levels of consumer expenditure at rates that I think we would see as being relatively healthy.”

Vosburg then weighed in on the progress in rolling out credit card chip technology across the country in order to improve safety and reduce fraud.

“Roughly 70% of our credit cards have been reissued with a chip. We’re not quite as far along in getting terminals into the marketplace that can read a chip. We’ve got about 1.4 million terminals in the marketplace today.” Vosburg continued, “When we get to a point where we’re roughly 60% of the cards, which we’re already at, and 60% of the terminals, we will have hit a tipping point where this market will be as or more secure than a lot of other markets.”

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Vosburg also explained what makes credit cards with the chip safer.

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“The chip is fantastic technology.  It is a computer chip on a card that generates a one-time use code when the chip goes in the terminal and that can’t be counterfeited,” said Vosburg.

On the other hand, Vosburg said, “the magnetic stripe, when you swipe a card the old way, it’s a relatively easy technology to steal. You can put skimmers on a terminal, you can hack into a database and steal that data. If you steal the magnetic stripe data, you can go create phony cards and use them to conduct fraudulent transactions. With the chip, even if you get the data, you can’t use it. So it’s a very secure technology.”

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