Alabama retailers to accept ‘chip’ credit cards starting in October

That little gold chip on the front is going to make it tougher for thieves to steal your data. Instead of scanning your card through a magnetic strip reader, you will “dip” or tap the card to the card reader.

So why are the new cards important and is the transition already happening? The new specification, which uses biometrics with chip card transactions enable palm, voice, iris, or facial biometrics. Only 47% of consumers with a chip card have used it in a chip reader. It may take a few moments longer than the old swipe card, but the transaction will be more secure.

Young consumers had a better understanding of the change, while affluent households with more than $100,000 in annual income were most likely to have received an EMV card, with 55% reporting receipt. The strip on the back of your card will continue to work with all card terminals for the foreseeable future.

The magnetic stripes on traditional credit and debit cards store contain unchanging data.

After October. 1, liability for fraud that occurs as the result of transactions will be shifted to businesses that have failed to make the change.

According to Forbes, by the end of 2015, 70 percent of USA credit cards and 41 percent of US debit cards will have security chips. In many cases, the terminal will be included in the cost of the service.

In plain English, it means if an EMV or “chipped” card is presented to a merchant that does not have an EMV terminal and the transaction turns out to be fraudulent, the liability for the transaction now falls to the merchant.

Visa said that the design is built on the EMV chip standard, biometric cardholder verification that can be seamlessly integrated with the technology used by 3.3 billion chip cards around the world stressing that financial institutions, solution providers, and others in the payments ecosystem can rely on an interoperable and consistent infrastructure for supporting biometrics.

If you travel overseas regularly, you’ve probably already seen chip card technology in action.

Commenting on the development, Senior Vice President of Risk Products and Business Intelligence, Visa Incorporated, Mark Nelsen said that there is increasing demand for biometrics as a more convenient and secure alternative to signatures or PINs, especially as biometrics technologies have become more reliable and available.

As the October 1st liability shift approaches for banks and retailers to use new “chip” credit cards, many in the financial services industry are making dubious claims about the deployment of new cards and the readiness of retailers. However, consumers will still need to keep their cards safe and confirm the accuracy of all their spending data.