It is not often, but there are times when the United States looks as if it is still living the frontier life, back at least two or three decades from the rest of the world. This is especially ironic, puzzling and can even be tragic, given how forward-leaning it is in many spheres of contemporary life.
Backwardness and lagging behind is particularly evident in the question of the technology the U.S. deploys on credit and debit cards.
While the world is equipped with micro-chips containing encrypted information, and thereby providing a level of security above the magnetic stripe, the U.S. and one other country in Africa, continue to use cards with a magnetic stripe.
It is those magnetic stipe credit and debit cards that have compromised in the hacking debacle that faces some 110 million Target customers.
But the real story lies behind the failure to keep up with the technology.
Who is going to pay for the leap into the chip cards?
In most countries, there is a separation between merchant banks and retail or consumer banks, while in the U.S. that distinction does not exist. And although the credit card companies continue to charge exorbitant interest rates of high teen percentages, or higher depending on the credit worthiness of the card holder, and VISA and MasterCard provide a level of protection that does not accompany the debit cards, no single entity is willing to "purchase" the new technology, even though we all know that whatever the new system would cost, the consumer would eventually pay the freight since the cost would be passed along to him/her buy whichever institution made the initial investment.
Preserving the "freedom" of the business and bank owners/operators is now costing 110 million, (and this kind of hacking incident could be replicated many times before the system is changed) loyal and credit-worthy, and honourable consumers who bought at Target in the month before Christmas, considerable inconvenience as well as lost cash in many cases.
So it is the consumer who suffers, (not to mention the loss in business to Target) while the "big players" fiddle, and while Congress which has not even entered the credit card business in any significant way for several years, while the technology has galloped into the future, sits idling its million-dollar engines, smoking cigars and drinking martinis. (Over 50% of the members of Congress now qualify as millionaires, according to the latest reports on their personal wealth!!)
A similar "falling through the cracks on a serious public issue in both Canada and the United States exists over who is going to purchase new rolling stock for the purpose of transporting dangerous materials on the railroads that criss-cross both countries, especially with the advent of the new and more dangerous crude that is coming from both North Dakota and the Alberta tar sands in search of new markets.
The current edition of tanker rail cars (DOT 111) carries the number of the U.S. piece of legislation that brought them into service, with their relatively thin metal skins, and their relatively insecure connections that have proven to break easily in the event of a crash, of which there have been two in the recent weeks in Canada, first in Lac Magantic in Quebec and then in Plaster Rock in New Brunswick.
While the Canadian government has proposed tougher standards, thicker walls and safer connections, the cost to convert the hundreds of thousands of DOT 111 cars currently in operation on both sides of the 49th parallel is estimated to be $1 billion. Currently the existing cars are owned by several principals, including the leasing companies, the oil companies the rail companies and some transport companies. None of those principals is prepared to bear the cost alone, even though, once again, whoever is consider to be the "consumer" will ultimately bear the cost in additional price hikes.
And the legislation that has been outstripped by the advances in the acquiring of crude, more flammable and therefore more dangerous in the event of a derailment, the legislation and the regulations lag behind the public protection of ordinary people living in small towns and villages through which the national rail lines are built.
So on both credit/debit cards in the U.S. and on rail cars designed to transport dangerous materials on both sides of the 49th parallel, governments are failing the ordinary people, in areas that are proving dangerous to their bank accounts and, although less frequently, to the safety of their communities and their lives.