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Is America upgrading? Or catching up with the majority of other countries?
You might see yourself inserting a card into a credit card reader instead of swiping a card, and here’s why:
Banks are issuing new chip-enabled cards that must be inserted and held into a credit card reader. The days of swiping might be over, but a signature will still be required.
The small EMV computer chip placed on the front of credit cards gives each purchase a unique code that makes it impossible to counterfeit the card. This is the beginning of the end to credit card theft.
On Thursday, Oct 1 banks and retailers will partake in this significant transition to the “new” form of payment method by installing upgraded credit card readers. For those retailers who do not upgrade, they will take the liability for any fraud on cards.
While this will increase security on individual credit card purchases, online transactions are still unprotected. Employees are learning how to use this system, and transactions may take up to 5-10 seconds, instead of the usual 3-5 seconds. Retailers will spend big bucks on this upgrade depending on their corporation size.
The EMV cards will cost $1.20, whereas the magnetic stripe cards cost issuers $.20. The extra dollar outweighs potential risks of fraudulent activities.
Although this may seem like a new technology in the states, this form of payment has been around in many other countries for decades.
The chip cards will continue to have magnetic stripes to ensure all customers can continue to pay with their cards until retailers have transitioned. While the credit card readers will have the option to swipe, it is recommended to replace the card in your wallet in order to refrain from any fraudulent activity.
Sources:
http://www.bloomberg.com/news/articles/2015-09-29/what-that-chip-in-your-new-credit-card-means-for-you
http://money.cnn.com/2015/09/25/pf/emv-chip-credit-cards/index.html?iid=hp-grid-dom
https://www.chasepaymentech.com/faq_emv_chip_card_technology.html
http://www.americanbanker.com/bankthink/emv-cards-the-beginning-of-the-end-for-hackers-1076988-1.html
