CLEVELAND — If you haven’t seen them yet, odds are you’ll see them soon — new credit cards embedded with a micro-chip to help keep your data safe during transactions.
The process of swiping your credit card will one day go away. The new method is called chip-and-pin. Chip and pin, commonly referred to as EMV, is already popular in other parts of the world, especially in Europe.
EMV requires you to insert your card into credit card machines instead of swiping the card. While the card is inserted, you enter your pin code and wait for authentication. Only when the transaction is approved do you remove the card.
In the U.S., some card issuers don’t force you to use a pin and will fall back to requiring a signature. This method is still safer than magnetic strips.
Why the change? Security is the primary reason.
Today’s cards store your credit card number in the magnetic strip. That technology has been around for about 50 years, and thieves have found ways to steal your data from that strip.
The new chip method defeats that by encrypting card data on the chip. Also, a unique code or token is created for each transaction that is authenticated using your pin. If a thief tries to reuse that token for later use, the transaction will be denied.
Anthony Catalano, a Qualified Security Assessor at SecureState says the changes are a step in the right direction.
“They’re moving as quickly as possible to get the equipment in place so they can do these pin and chip transactions,” said Catalano. “The credit card issuers estimate there’s going to be 15 million pin cards issued by the end of 2015.”
The plan for merchants is to have EMV capable terminals in place by October. However, some retailers are already using them today.
It’s important for merchants to upgrade their terminals because they become liable for fraudulent transactions when the new tech is rolled out.
“The liability is going to shift from the bank accepting responsibility for a breach to the merchant taking responsibility. And nobody wants to do that right now,” said Catalano.
Under the new rules, gas pumps aren’t required to get upgrades until 2017, and the chip still doesn’t add any protection for online purchases.
But if by chance you already have a chip card and you visit a retailer with upgraded terminals, feel free to give it a try. It’s the way of the future. And one day, it won’t be optional.