By Kaye Foley
Many of you may have noticed that your credit card has had a bit of a makeover recently. That’s because the United States is finally getting chip cards for increased credit card security.
The smart chip, or EMV chip — which stands for Europay, MasterCard and Visa, the first supporters of the technology — is an update of the outdated magnetic strip. With magnetic strips, when you swipe, a payment processor matches the information stored on the strip to your account in order to verify the credit card. That data always remains the same, meaning that if someone were able to lift it or skim it, he or she could copy your data onto a fake card.
But that’s not the case with chip cards. The data in the chip is constantly changing, creating a unique code for each transaction. This makes it extremely difficult for criminals to pinpoint the needed information to create a counterfeit card. Chips won’t safeguard against all fraud — like online or stolen cards — but it will limit a lot.
The switch to chip cards is taking time. It’s expensive for all involved: It costs more to make chip cards, and the new payment terminals can cost upwards of $1,000. Still, the changeover kicked into high gear with a liability shift in October 2015. Stores or credit card issuers who hadn’t updated by then would be on the line for any fraudulent charges that might occur. Most banks are still in the process of reissuing cards. Some big stores and chains are also all set with the chip. But not all retailers—like many mom and pop stores—have the right equipment or software.
In the future, it’s possible that chip cards in the United States may require a PIN number instead of a signature. This would be an extra measure of security, but for now, it’s one step at a time on the customer learning curve. So the next time you dip instead of swipe, when it comes to chip cards, at least you can say, “Now I get it.”