New Credit Card Technology Could Mean More Chargebacks, JSA Warns

Our credit cards are now secured with computer chips, but the world’s largest retail trade group says consumers are no safer, while businesses are being forced to spend up to $35 billion. When consumers shop at retail stores with EMV technology, instead of “swiping” their card, consumers will “dip” the card into a slot in the terminal or, in a few cases, “tap” the card on a flat reader.

In part, that’s because a 50-year-old technology that relies on a magnetic stripe at the back of the card, has lingered in the USA despite being replaced in most of the world.

But the switch over has been slow.

The necessity of this technology has been ignored over the last years.

What’s Totally different About These Playing cards? This process allows for the chip to encrypt the data to secure the transaction. That implies that if a thief acquired that code, it couldn’t be used to make one other buy. Chip cards are much harder, if not impossible, to duplicate. Not like playing cards with magnetic strips, the chip creates a singular transaction code at any time when the cardboard is used.

But the magnetic strip won’t be disappearing. “Because there aren’t any chip readers online”. If someone attempts to reuse the transaction number, access is denied.

After inserting my card into the terminal, my first instinct was to pull it out right away – like you would do at an ATM, or paying for a MetroCard for the subway – but I knew I was supposed to leave it for a few seconds, so I resisted.

Ask about receiving an EMV card. Why Is Everyone Talking About This Now?

Here’s the problem, say Portland-area retailers: They paid to upgrade their systems by the October 1 deadline, but others involved in the changeover didn’t move with the same sense of urgency. This is known as the liability switch.

Most people have only had one experience with technology: It gets more and more efficient and gets faster and faster. Many consumers have already received new credit and debit cards with the EMV chips (it’s the small metallic square), but if you have not yet received one, contact your financial institution. If a business does not have the new EMV reader, they are liable for the cost of any purchases made with a counterfeit card.

But Visa has said that there has been significant progress, with more than 314,000 merchant locations in the usa enabled to process chip cards as of September 15.

The change is being driven by the banks and payment processing companies – Visa, MasterCard and American Express.

It’s also worth noting that gas stations will not be upgrading their equipment until October 2017, so the pump will continue to be a target for offline fraud.

“A fraudulent transaction 60 days ago that happened at the point-of-sale within a merchant’s business – [the] bank would cover that fraud”, said Douglas Mearkle, senior VP and head of US Merchant Services at TD Bank. The American Bankers Association estimated that bank account fraud cost the industry $1.74 trillion in 2012, the most recent year for which data is available.

October. 04-Banks andcredit score unions have began sending out new chip-enabled playing cards. That’s as a result of it’s a major expense to interchange gear and retrain staff. You may need to sign too.

But while the chip blocks the hacking or copying of a card, the use of a PIN rather than a signature makes a difference if a card is stolen or lost. It would work in a similar way to your ATM card.

These protections gained’t change since you don’t have a chip card. Safety specialists imagine this can be a very secure method to pay for issues.

© 2015 Associated Press under contract with NewsEdge.