New Chip Embedded Credit Cards Inconveniencing Business Owners

Consumers still will be able to use existing swipe cards in the EMV readers – until banks replace those cards.

The passing of the Thursday deadline didn’t apparently cause any significant problems for store operations, according to comments from five national retail and credit card officials.

“We expect fraudsters to shift to the weakest link, which will be those merchants that have not yet adopted EMV and only accept magnetic stripe cards”, agrees Deanna Karhuniemi, vice-president of EMV Strategy for Chase Commerce Solutions.

A major transition is underway for retailers and consumers. Instead of simply swiping your card, you have to insert the card and wait for the entire transaction to end before you actually get your card back. Along outer Arsenal Street, those without readers included Starbucks, Dunkin’ Donuts and Buffalo Wild Wings. Visa has also dramatically increased the number of chip-enabled cards that it has in the market, going from roughly 20 million at the end of August 2014, to 151.8 million as of mid-September.

“While chip-and-PIN is the common form factor in the United Kingdom and Australia, he said in the USA, “the jury is still out”. In comparison, Visa had $631 billion in total transaction volume in the U.S.in the same quarter past year.

These cards are harder to counterfeit because that chip generates a unique code every time you put it into the card reader. What role do banks play in educating merchants about the pros and cons of upgrading their POS terminals to accept EMV chip cards? It is a little bit of a chicken-and-egg thing, says Vinnie Brennan, head of card services for payment processor Fiserv. “I can tell you that none of the restaurants have the new point-of-sale system yet, and I think it’ll take at least another year”.

Even though the October. 1 date was announced four years ago, it took until last year for banks and card companies to create and clarify specifications for processing chip debit cards, which forced a backlog in seeking terminal certifications, Horwedel said.

Chipped cards cost financial institutions more, Murphy said, and there are bottlenecks in the rollout process such as the backlog of orders at the card manufacturers.

Target and Neiman Marcus are just a couple of retailers to fall victim to security breaches, but now new liability rules are about to take effect. To ensure they’re working properly, the bank will test cards before sending them to customers.

That isn’t fazing executives at Visa, who insist the PINs-or even signatures-aren’t necessary for the cards to be sufficiently secure.

That includes checking online statements and credit reports regularly and when something looks suspicious, flag it to the card issuer.

“That is going to be safer for the customers which is most important, and with us dealing with merchants overseas and to detect fraud a lot faster”, Store employee Erin Scott said.

“Right now the liability is still on us, but as we roll these out it will go back to the merchant”, he said. “Particularly in the electronic business, the rate of fraud and the potential for fraud is so high we just couldn’t afford to be liable”.

Signatures are now still accepted as authentication, but shoppers are encouraged to set up a PIN code to enter with each transaction as an additional protective step against fraudulent activity. “If that does happen, they won’t have a choice but to move to PINs”.