How your credit cards will change starting next month
The magnetic strip on US credit cards is about to become obsolete.
Instead of swiping cards, consumers will “dip” them to pay for goods and services.
“Consumers are always protected with zero liability protection, but they should know that as we move forward, they are going to be prompted more often to insert their card into the terminal to do a chip transaction”, Ericksen said.
“The findings of this study indicate that EMV could pose serious challenges for credit card companies and retailers as the busy holiday season approaches”, said Jared Isaacman, founder and CEO of Harbortouch.
Visa tells me that it expects the rollout of the new security technology to take a few years.
The chip card attaches a unique code to each transaction.
J: We anticipate that about 45 percent of the 8 million USA businesses that accept electronic payments will convert to the new system by year end. In fact, almost all of today’s fraud comes from counterfeit cards made with stolen personal and financial data or online theft.
USA banks, credit card issuers and merchants are preparing for a big shift that occurs on October . 1, which will change the way fraudulent transaction liability is assigned – but many aren’t yet equipped for the switch.
Consumers who haven’t received these new, more secure cards will want to consider getting a new credit card with the EMV technology to make sure their financial information remains secure.
If a merchant swipes the magnetic stripe on a credit or debit card that has an EMV chip and its a counterfeit transaction, the merchant is liable.
You’ll see very slight differences in using these cards. However, only 26% of the highest income cohort ($150,000+) lacked knowledge of EMV credit cards. Payments send a lot more information in a chip card transaction, so Fiserv has made several enhancements to its systems to accept and validate that extra information, he said. There are no known instances of chip-card fraud so far.
Five blocks away, Eco Galleria gift store owner Kathryn Longo said she is waiting to see if the liability issue is a problem before investing any money in a change.
Similar to using magnetic-stripe cards, EMV cards are processed for payment in two steps: card reading and transaction verification.
Chip-and-PIN: Similarly, a chip-and-PIN transaction is comparable to paying with a debit card; the POS machine reads the card and you enter a PIN to complete the transaction. The chip cards, which Canada, the United Kingdom and much of Europe have already adopted, are more secure than the magnetic-stripe technology the US has used since World War II.
Not all issuers now offer cards with chips, but the security benefits might make it worth signing up with one that does. But at the same time, the possibility of fraud at the point-of-sale will decrease, which means the life of the card should be longer and the bank’s associated liability lower.
“If you hand your card off, you’re still exposing your account number”. Some credit experts doubt that it will have as drastic an effect on reducing fraud as planned. However, consumers will still need to keep their cards safe and confirm the accuracy of all their spending data.