Security researchers from NCR demonstrated how credit card thieves can rewrite the magnetic stripe code to make it appear like a chipless card again. This allows them to keep counterfeiting, just like they did before the nationwide switch to chip cards.
This risk is possible because many retailers are not encrypting the transaction. The discovery of this flaw bolsters the retail industrys complaints against the upgrade, which was forced upon shops by banks.
Adding to the problem, payment terminal makers keep producing machines that do not have the encryption by default. And vendors who sell and install these machines at shops do not simply flip the switch and turn on encryption. Retailers have to pay extra for basic security.
NCR researchers advised shops to encrypt everything in a transaction. They also said consumers should pay with special apps on their phones and watches whenever the high tech option is available.
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