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Amex Third-Party Data Breach is A Lesson For Bitcoin Users

Source: bitcoin

Bitcoinist_Amex

Making payments with a credit card is very convenient, as this method of value transfer is accepted both online and in-store all over the world. But at the same time,  so many different third party players are involved in the processing of credit cards, leaving customers exposed to financial information being stolen. Amex users have received a letter from the card issuer informing them about a potential hack recently. Bitcoin users could take note from this lesson, though, as there is no need to trust third parties with digital currency either.

Also read: Lisk Partners With Microsoft Azure, Chain of Things

Amex Data Breach Puts Cards At Risk

It is not the first – nor the last – time credit card users are faced with a third party data breach, as there are many hands through which this payment information passes along the way.  The letter sent out to Amex card holders informs them regarding a data security incident at a merchant where a set of Amex cards has been used in the past for legitimate transactions.

Apparently, that dealer did not take the necessary security precautions, as account information has been leaked due to this security incident. No systems owned or controlled by American Express were breached during this attack, though, keeping the number of affected users rather on the low.

The Amex Letter states the following:

“At this time, we have been informed that your current or previously issued American Express Card account number, your name and other Card information such as the expiration date, may have been compromised. Please be aware that you may receive additional letters from us if more than one of your American Express Card accounts were involved.”

A combination of the above credit card information is enough for internet criminals to purchase goods with stolen details, as most websites do not require more details than the basic information. Granted, most modern platforms will require users to send a copy of their identity card and a utility bill to process the order, but that is not always the case. Amex users will need to keep a close eye on their credit card statements over the next few months, and dispute fraudulent charges as soon as possible.

Bitcoin Users Need To Stop Trusting Third Parties

Although there are many benefits to Bitcoin over more traditional payment methods – such as credit cards – there is a valuable lesson to be learned from this debacle as well. Trusting third party services which control user funds at any given stage is never a good idea, as bitcoin transactions were designed to occur between parties instantly and remove the middlemen from the equation.

Far too many Bitcoin users are keeping their funds in online wallets or stored at exchanges, which put their money at risk as well. If these platforms were to be breached, or face an outage for whatever reason, there is no way to access funds. Third parties have no place in the Bitcoin world, and stories like the Amex breach show why Bitcoin users need to be more careful about where to store their funds.

What are your thought’s on this umpteenth credit card data breach? Should we push for less third party usage in the Bitcoin world? Let us know in the comments below!

Source: OAG

Images courtesy of Amex, Shutterstock

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Amex Third-Party Data Breach is A Lesson For Bitcoin Users

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Fidelity Drops Long Time Partners to Bring in Bitcoin Competitors

Source: bitcoin

Fidelity

Financial services firm Fidelity Investments has dropped two of its long time partners during a process to integrate financial services that provide direct competition to bitcoin.

Also read: More Signs of Trouble in Asia: Barclays to Cut Investment Banking Jobs

Fidelity Moves into the FinTech Age With New Partnership

Fidelity is ending its partnership with credit card company American Express and the Bank of America Corporation, “a 12-year partnership that has generated billions of dollars in fees,” according to Reuters. This is another blow in a series of setbacks for American Express, which recently lost its partnership with Costco Wholesale Corporation. According to Reuters, American Express reported that the loss of the Costco partnership would hurt the credit card company’s profits for two years. Now, losing its deal with Fidelity, American Express’ future looks even more bleak. However, an American Express sokesperson claimed that Fidelity accounted for less than 1 percent of billings, hinting that the loss might not be so devastating. Furthermore, a spokesperson from Bank of America said that the termination of the partnership was a mutual decision.

In place of American Express and Bank of America, Fidelity will be teaming up with US Bancorp and Visa Inc. This new partnership will launch the Fidelity Rewards Visa Signature Card and the Fidelity Card. With these programs, users can earn unlimited 2 percent cash back with no annual fees or caps when directing their rewards into eligible Fidelity accounts.

This partnership will also produce credit cards with chip security technology, which will provide users with access to digital payment methods such as Apple Pay, Samsung Pay and Android Pay. This move brings Fidelity in direct competition with bitcoin, which specializes in anonymous, online payments with low fees. Additionally, Samsung recently announced that it will expand its Samsung Pay to online shopping in 2016. Fidelity’s new partnership will extend Samsung’s digital wallet expansion to an even broader audience, further stiffening the competition against bitcoin.

Should Bitcoiners be Worried?

Bitcoin will see new competition in 2016, but it is unclear whether or not these traditional finance companies will manage to push bitcoin out of the digital payments industry. The bitcoin community is working to solve pressing issues with the digital currency in order to make it a more efficient and easier to use currency. Core developers are currently deliberating over the best course of action for achieving long-term scalability, which will allow the Bitcoin network to process transactions on a level comparable to Visa and other major payment networks. Bitcoin’s block reward will also undergo a halving this year, which many believe will cause the bitcoin price to soar. If this proves to be the case, then bitcoin will receive a boost that should draw investors and entrepreneurs into the bitcoin space, further accelerating growth and development.

What do you think about Fidelity’s new partnership? Let us know in the comments below!


Images courtesy of the Liberty Science Center, American Express

The post Fidelity Drops Long Time Partners to Bring in Bitcoin Competitors appeared first on Bitcoinist.net.

Fidelity Drops Long Time Partners to Bring in Bitcoin Competitors

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