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Retailers and banks can also reduce risk by moving away from cards that use magnetic strips, which are easily faked. Many countries in Europe, Asia and elsewhere have already replaced magnetic strips with chips, which are harder to duplicate. Chip-based cards also require customers to enter a secure code before they can be used. That’s partly why the United States accounts for nearly half of all global credit card fraud, even though it generates only about a quarter of all credit card spending. American retailers, including Target, have resisted (foolishly, as it turns out) the introduction of chip-based cards because they would have to invest in new equipment to handle them. (Target now says it supports chip-based cards.)

No security measure will ever rid the economy of theft and fraud completely. But there is evidence that companies could do a lot more to protect data.

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