Will the new EMV chip make your credit card safer?

The alternative will be to go online and commit online credit card fraud.

How Do EMV Smartchips Help Prevent Credit Card Fraud?

You’ll also see a lot more stores become EMV card friendly, because if you have Mastercard or Visa, after October 1, 2015, if your card doesn’t have the chip, than that store will be responsible for fraud or the bank that issued it. “The Governor’s support for chip and PIN technology will send a clear and important message to the credit card industry to invest and deploy chip and PIN cards for Californians and consumers across the country”. Perhaps even more discouraging is the continuing uncertainty about whether it will actually effectively reduce fraud.

According to the latest issue of The Nilson Report, fraud losses in the U.S. increased to 12.75 cents for every $100 in volume annually. U.S. issuers were slammed by losses due to counterfeiting, fueled by data center breaches that made available tens of millions of stolen card account numbers as well as personal cardholder identification information.

The new anti-fraud credit cards sound great. So what’s the point in making the switch?

The AP-GfK Poll of 1,004 adults was conducted online July 9 to July 13, using a sample drawn from GfK’s probability-based KnowledgePanel, which is designed to be representative of the U.S. population. Even when a merchant is equipped to read the chips on our cards, we still often get away with signing for purchases, rather than entering PINs, thanks to the peculiar hybrid chip-and-signature card technology that falls somewhere between a magnetic stripe card and a chip-and-PIN card in terms of security. This second layer of authentication makes the technology far more secure, over tradition swipe & sign cards. They could walk into a store and buy goods illegally.

“It is a major change in something people have done in the same way for decades”, he said.

In one of those files, a caller claimed to be a Pennsylvania businessman looking to accept credit card payments for his heating and air condition business. “Is your business ready?”

The new cards have a chip, but they still have the magnetic stripe that holds all the sensitive information a hacker needs.

Previously, crooks with stolen credit card numbers could manufacturer their own credit cards, printing a magnetic stripe for the card with the stolen credit card number. If merchants don’t have the proper chip-reading terminals by then, they will be liable for fraudulent charges, not the bank.

Well, it turns out that if you don’t have the right machines and software in place, it’s you who will be liable for fraud committed with any counterfeit credit cards. That’s an important question, but it’s not the same as asking how we can most effectively reduce the crime itself.