New credit card technology makes buying more secure
Posted August 13, 2015 6:54 p.m. EDT
Updated August 14, 2015 4:58 p.m. EDT
Raleigh, N.C. — More than 1 billion credit and debit cards are being issued with new security measures in response to data breaches.
Lately, replaced credit cards have looked a little different because they have a little metallic chip. The chip and pin cards have been used in Europe for years, but now banks are rolling them out here with the hope of reducing fraud.
Half of the world’s credit card fraud happens in America even though the country handles only about one-quarter of all credit card transactions. That's why American banks are issuing the new, more secure cards that look and work differently. The chip technology is called EMV, which stands for Europay, Mastercard and Visa.
"What we're getting with chip is the ability to secure payments in the store environment," Visa representative Stephanie Ericksen said. "It generates a unique, one-time code that changes with each transaction"
The chip won't prevent data breaches but it will makes it harder for criminals to counterfeit a card or successfully profit from what they steal. Banks and retailers are working toward an October 1 deadline, when liability for fraudulent charges shifts to whichever party was least EMV compliant.
For now, the cards can still be swiped and as more retailers transition, the card will just be inserted into a reader.
“There's no additional personal or privacy information that's being stored in that chip,” Eriksen said. “For now [with] transactions made over the phone or online, nothing changes.”
Another bonus is that with other countries already using chip technology, it will be easier to use an American credit card when traveling.
It is expected that not everybody will be ready for the October 1 deadline, and it will still be a few years before PINs are required to add an extra level of protection.
Of the 1.2 billion credit and debit cards in circulation in the U.S., it's expected roughly 70 percent will have chips by the end of this year.