We’ve done a couple of posts on the cab drivers’ issue with credit cards over the past year. The last one was published only a couple of months or so ago, and I really didn’t expect to revisit the subject any time soon. But the stories just keep coming and are getting ever more interesting.
The latest one is coming to us courtesy of Credit.com’s Christopher Maag who tries to make sense of a story about a sign posted in a Dallas cab warning customers about the dire consequences of paying their ride with a credit card. In a way, there is nothing new here, as cabbies are reluctant to take cards all over the U.S. as many of us know. But there is a novel twist in the Dallas event, which demonstrates the lengths to which cabbies would go in their efforts to get their customers to keep the hated plastic rectangles in their wallets and use cash instead. And the fact that even credit card specialists are confused by the Texan trick speaks volumes about its effectiveness. Let’s see if I could clear up the matter.
What Happened in Dallas?
Here is the story, as related by the protagonist, BoingBoing.net’s Cory Doctorow:
On my way to Dallas-Fort Worth airport today, I snapped this picture of the sticker on the inside of the back-seat passenger-side window of my taxi. It warns “The method used to authenticate credit card transactions for approval is not secure and personal information is subject to being intercepted by unauthorized personnel.” There’s some history there, I’m guessing. Consumer warnings are very nice, but I’m left wondering why they don’t just update the firmware on the credit-card box with some decent crypto (unless this is because they use a CB radio to call in card numbers, which is pretty danged foolish).
Well, that sounds quite terrifying, doesn’t it? If I didn’t know anything about credit card processing, I’d be sure to keep my card securely in my wallet. But what are we to make of this warning?
How Secure Is Using a Card at a Cab?
Maag is unsure:
[I]t’s hard to know whether the sticker is just a ploy without knowing more about the credit card terminal inside the taxi.
Maybe the taxi company uses old terminals that aren’t covered by the latest standards, Krehel says. Maybe the terminals are new, but weren’t installed properly. Either way, it’s possible that data sent by the terminals might not be properly encrypted, [information security officer at Identity Theft 911] Krehel says.
Are these concerns legitimate? Well, they are legitimate in the sense that all these scenarios are plausible (although unlikely). But the same scenarios are just as probable to play out in, say, a convenience store or a gas station. None of Krehel’s concerns are specific to the cab card acceptance environment. And yet, you would have to look very hard, before you could find a similar warning sign next to a convenience store’s cash register (or other cabs, for that matter).
See, the technology enabling card acceptance at cabs is not new and, if there were still unresolved security concerns about it, it would have been shut down long ago. Furthermore, I can assure you that if the cab company had informed its payment processor about its own credit card acceptance security concerns, the processor would have ensured that everything is set up correctly and that proper data security standards have been followed. It’s a simple check-up procedure and the potential liability is too great not to do it.
The fact that the cab company had chosen to display the warning sign, rather than work with its processor to ensure that card payments are securely processed tells me unequivocally that this is another cab ploy to discourage customers from using cards for payment. And it’s one that isn’t that difficult to discern.
So I’m really puzzled by Maag’s and Krehel’s tentativeness. I understand that we don’t know all the details of the story, but we do know enough to be able to figure out what took place in Dallas with a fair degree of certainty.
I’ve said this before, but it’s worth repeating it. Cab drivers have a perfectly legitimate issue with the processing fees they are charged for accepting cards, which are truly exorbitant. But that is not their customers’ fault. The culprits here are the cab companies (I’ve explained why here) and the drivers should take their complaint to them.
Image credit: Behavioral Economics.