Experts expect the gap to narrow over the next six years at a rate of about 2.8 million new cardholders per year. One common fraud tactic faced by retailers is use of a card with a fake hologram. On legitimate cards, the hologram is actually embedded in the plastic upon manufacture. Counterfeit credit cards commonly contain a hologram decal purchased from an illegal distributor. These holograms are affixed to the top of the card, rather than embedded in the card, and can be seen or felt to rise slightly above the card face.
Merchants can spot fake cards by an inconspicuous examination of the hologram.
Due to the shortcomings of holograms as a fraud deterrent, Slotter says, many credit card manufacturers currently are modifying magnetic strip coding to include additional personal identifiers, such as customer photographs, fingerprints and personal histories. There are systems which can digitally encode a customer's photo within the magnetic strip, enabling verification through specialized processing terminals at the point of sale. But such technology is still quite expensive. He says the industry foresees a time when bank customers will be able to use a single card to accommodate a variety of transactions, including ATM withdrawals, credit purchases, direct bill payments and purchases against predetermined stored value levels. Yet staying ahead of criminals isn't easy.