Security experts have told me that perhaps only one in ten company credit card breaches make the news. We’ve heard about some of the big ones lately, including those at Target and Neiman Marcus. So what about the other 18 companies that we didn’t hear about?
These are companies that are likely so fearful about getting this bad news out that they keep it hidden. In the meantime, you and I are getting calls from our banks about suspicious activity or our cards are simply shut off with a letter that comes in the mail a week later, an experience which happened to me recently. Seriously, a snail-mail letter?
Look, I travel quite a bit. Getting my credit cards shut off without warning and without the opportunity to get a new card immediately is not just inconvenient anymore — it can truly leave me stranded. I usually carry two credit cards now, from two different banks, to improve my chances of paying for my hotel room and flying home without incident. And, in the past few years, I’ve been traveling with extra cash. In fact, I travel with much more than I’m comfortable carrying, just because I can’t trust the banks and corporations I do business with to protect my payment privacy and the validity of my credit cards.
Are They Negligent or Criminal?
Are corporations just the target of hackers? That’s the way the news media likes to spin it. I can assure you that it’s more than just being a target of evil doers. Oh, the poor corporations. Don’t believe it.
Corporations, big and small, are at the very least negligent. They don’t invest the energy and the money required to keep our credit card and personal information safe. They lack policies to lock down sensitive information. They don’t have clear access logs and secure backup procedures in place. And, they don’t use encryption options that are now available in the marketplace. Why? Because they don’t see the value to their bottom lines to do the right thing and invest in securing our personal information. It’s an acceptable risk for them.
The largest corporations, the ones with deepest pockets, have access to levels of encryption and technologies that ensure safety that weren’t even available a few years ago. Yet, most of them won’t invest. They simply do the minimum, just what’s common practice, and hope for the best rather than invest to properly protect your credit card and personal info, and mine.
Banks are no better. This is their racket, after all. Credit cards are their cash cow. They collect massive amounts of money everyday, charge exorbitant interest rates as high at 59.9% annually or higher, and still do not sufficiently invest to assist their own merchant companies to keep our private information confidential. US legislators allow them to collect outrageous fees, monthly and annual fees, over-limit fees, membership fees, and interest rates that loan sharks would be pleased to receive!
To me, this is far more than negligent.
Selling Credit Cards for Bitcoins
Criminals are dumb. Generally, I agree. In the world of bitcoins, however, criminals are getting wise to the pseudo-anonymity and the ease with which people can pay online ransoms with bitcoins. A recent Windows virus called Cryptolocker is an example of bitcoin ransom. This virus was encrypting files on people’s PC’s and requiring a ransom to be paid in bitcoins to get them back, or decrypted. Otherwise, all the users files were lost forever, unless they had a recent backup copy.
Criminals are now using bitcoins as a method to sell your stolen credit card information to the highest bidder as well. It’s like Ebay for criminals. And bitcoin — the online equivalent of cash — is a popular way to sell this information.
What is it that these criminals are really telling us? The answer is simple. Bitcoin transactions are much safer than credit cards. That’s why criminals are now preferring bitcoins for their evil doings.
An Opportunity for Bitcoin
All this theft, ransom, and cover-up is bringing to light how fragile and unsafe the entire banking industry is. Their reliance on credit cards is really trust in an outdated technology. And as a reminder to those new to this conversation, banks are not technological leaders. This is simply another example.
The upcoming loss for banks is palpable. If they are listening, they must be scared. The massive profits that financial institutions make on credit cards is truly insane. Nearly 3% of every transaction in the USA, Europe, and much of the world is paid to banks. For what? To use an old, outdated technology that risks our ability to buy and sell the things we need.
It’s become more than an inconvenient for banks to shut off our credit cards in today’s world. We are practically helpless when on the road, or away from home, at least until the bank replaces our card. And that typically takes 7 to 10 days. Emergency cards replacements exist, but banks won’t ship these cards to certain parts of the world. And they still can take 1 to 3 days.
New cards with their new numbers need to be given out to all the merchants that you do business with. In many cases, regular monthly payment accounts need to be updated. Hours of time and effort need to be invested by each of us because banks and merchants improperly managed our information.
After decades of issuing credit cards, banks have proven that these plastic cards are not safe, they are unreliable, and that they are very risky. Apparently, credit cards cannot be made any safer than they are today, or this change would have been made already. Change must come and bitcoin has just the answer.
Bitcoin is Like Cash
Like cash, bitcoins are given to another party in a transaction. Credit cards, on the other hand, give merchants the authority to take funds from your account. Stolen credit cards simply pass that ability to withdraw funds, yet do so without authority.
Bitcoins, however, are one-directional. No one can take money from your bitcoin wallet with just your bitcoin address, the equivalent of your credit card number. Credit card numbers, and bank account numbers as well, are two-directional. People can deposit and withdraw funds with these numbers. This is an obvious and immediate failing of both credit card and bank account numbers. And this is one that cannot continue. It is negligent of banks to presume that this way of doing business is the best that they can do in today’s world.
As people learn more about these incidents of theft and the associated lack of proper protection of our personal information, bitcoin transactions will become more popular. It will be a method of transacting that more people want to learn about. And it will become the safer alternate to credit cards. In fact, it already is much safer than credit cards.
The days of credit card breaches are coming to an end. That is, I believe tht credit cards are in their final days. This change won’t happen overnight. Yet the rash of negligent credit card data management by corporations and banks will only accelerate the adoption of safer payment technologies such as bitcoin.
It’s time for a 21st century payment option. That option is bitcoin.