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With the increased use of financial transaction cards comes increased exposure t o lossesfiom accidental and intentional misuse. An attractive new technology that promises both security improuements and economic benefits is the integrated circuit card. This article compares the features, capabilities, and security advantages of integrated circuit cards uith those of current magnetic stripe cards. A ny transaction system that dispenses goods or cash is an attractive target for misuse from a broad range of perpetrators. Financial transaction cards (FTCs) , the wallet-sized plastic cards used to obtain financial services (e.g., bank and automatic-teller-machine cards), have been misused both accidentally and intentionally by many people, from those to whom the cards are issued to professional criminals intent on wide-scale theft. During the first decade in which magnetic stripe FTCs were issued in the US, the losses for Visa and Mastercard credit cards averaged about 1% of gross sales. Of these losses, 15% resulted from card-related fraud.Exhibit 1 breaks down the credit card losses for a typical year.