Watch for new technology at the cash register
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New option offers stronger protection against fraud
MILWAUKEE – A crucial technological advancement is appearing in consumers’ wallets and greeting them at the checkout counter: “smart” credit cards and merchants’ card readers. The chip cards, known as Europay, Mastercard, and Visa, (the three companies which originally created the standards) are also called “EMV cards”, “chip-and-pin cards” and “chip cards.”
This new generation of anti-fraud credit cards contains a microprocessor chip that makes in-store transactions more secure by generating a unique, one-time code that is needed for each transaction to be approved. If a thief gets hold of your card, reproducing the information will be much more difficult.
“With your personal and account information stored in a small electronic chip embedded in the card, it’s a more secure way to store information providing better protection against credit card and identity theft”, says Ran Hoth, CEO/president of BBB Serving Wisconsin. “While the change won’t solve all security problems involving credit cards, it does add additional security which is a good thing.”
Merchants both large and small have an incentive to update their point-of-sale terminals to accept the new EMV cards by October 1st, when liability and losses due to fraudulent transactions will shift from the card issuer to the merchant. So you’re likely to see a lot more of the new card readers popping up over the coming months.
Unfortunately, the EMV technology does not yet stop fraudulent use of a smart card in No Card Present (NCP) commerce, such as telephone and internet purchases. The EMV chip technology is intended to combat card-present fraud in stores.
Many cards will still have a magnetic stripe on the back containing information. That stripe is a legacy that enables consumers to use their cards in stores and countries that do not yet have EMV technology. Once those stripes are phased out as they have been in other countries, it will make things considerably more difficult for credit card thieves.
The BBB Serving Wisconsin has some tips for the use of EMV cards:
• Ask about receiving an EMV card – Financial institutions continue to replace existing credit and debit cards with the smart EMV cards. If you have not yet received one, contact your financial institution.
• Don’t forget your card – You must leave your card in the reader until prompted to take it out. You’re going to sign for the purchase, if a signature is required, while the card is in the reader. If you’re in a hurry, you may forget to take the card out of the reader.
• Carefully review financial statements – This is vital all year long, but more especially when you use your cards a lot. The moment you spot an error or unauthorized charge, call your financial institution immediately.
The Wisconsin Bankers Association also has some additional tips about what consumers need to know about the new cards:
How do I know if I have a chip card?
At the end of 2014, approximately 120 million chip cards had been issued in the U.S., so many consumers are already using them. Chip-enabled cards have a small metallic rectangle on the front of the card, and most still have the traditional magnetic strip on the back. These cards can be used with any retailer, whether they accept chip cards yet or not.
What’s different about using the new cards?
If you’re unsure whether the terminal you’re using is chip-enabled, swipe your card as you normally would and follow the prompts. If the terminal is chip-enabled, it will prompt you to insert it instead. If you already know your chip card works there, start by inserting your card. Then insert your card with the chip toward the terminal, facing up. Do not remove until prompted. Provide your signature or PIN as prompted by the terminal. Some transactions may not require either. When the terminal says the transaction is complete, remove your card. Always remember when you use your chip card to follow the prompts on the terminal and leave your card inserted until prompted to remove it. Retailers are training their cashiers on this new technology, so they’ll be able to guide you through the new process.
I don’t have a chip card yet. Will my magnetic strip card still work?
That depends on where you’re using it. During the transition to EMV (the next few years, at least) most retailers will use point-of-sale terminals that accept both the old magnetic strip cards and the new chip cards. Start by swiping your card as you normally would. If the device is chip-enabled, it will prompt you to insert your card instead.
Where do I go to dispute fraudulent purchases made on my chip card?
If you experience fraud on your chip-enabled card, contact your bank and the card issuer (the phone number is usually on the back of the card) immediately. Your bank will help you protect your funds and the card issuer will cancel the compromised card and replace it.
Consumers can also visit www.GoChipCard.com to learn more about how EMV cards offer better security and how to use them.
