Mike Steele knows better than to expect that any weapon he deploys against cyber-hackers will defeat them completely. “We anticipate what will help us reduce any losses,” says Steele, VP of accounting and controller of the Lake Michigan Credit Union. “We look for any technology that will give us significant advantages.”
Lately, for card issuers this has meant shifting from issuing magnetic striped cards to chip-equipped EMV cards (the initials refer to standard-setters Europay, MasterCard, and Visa), which are far more secure. Even with merchants upgrading their payment terminalsto accept the new cards, the change “won’t stop the hacking,” says Steele. With over 460,000 members, Michigan’s largest credit union, like every financial institution, will have charge-offs for fraud as a result.
Receiving Payments From Customers
Steele ranks ACH, the electronic payment service, as “reasonably secure.” He adds: “We haven’t had any significant problems with those transactions that are done via ACH. But that’s not to say there couldn’t be an issue.” As for corporate and procurement cards, Steele observes that the card processors “have fairly good fraud detection nowadays. And from what I understand, they get better and smarter all the time.”
Indeed, according to a recent survey of finance executives, cards are considered roughly on par with electronic payments services ACH and EFT in areas such as promptness of payment and convenience. While 95% of respondents ranked ACH/EFT performance as “excellent” in terms of security and protection from fraud, 83% graded cards on that level . However, with the introduction of chip/EMV technology, that gap is closing fast, and corporate cards offer the advantage of rebates and/or rewards along with the benefit of cash float. In fact, cards stack up very favorably in all the requirements tested in the survey. In addition, survey respondents also cited the ubiquity of card acceptance as a strong driver to receive payments more efficiently and securely.