This fall, millions of Americans will receive new credit cards with embedded chips in front of the cards. Payment processing will change come October 1 due to the nationwide migration to EMV technology. This new technology aims to provide extra security and reduce fraud.
The silver chip, known as the EMV (Eurpoay, Mastercard and Visa) computer chip technology, will protect users from possible credit card fraud. Instead of reading the magnetic strip on the back of the card, payment will be done by inserting the front of your card which has the embedded microchip into the machine and then you either sign or enter a pin, as reported in The Business Insider.
There will also be a change of liabilities when it comes to fraudulent purchases. Merchants will be sharing responsibility for fraudulent purchases on your card if they do not have the new machine installed by October 1. Currently, if one falls victim to credit card fraud, the issuing bank usually covers the expenses incurred. However, if the storeowners have the new terminal installed, the bank will shoulder the blame as they are doing today. Likewise, if the issuing bank has not started the new technology, the bank will still be responsible for fraud activities.
This embedded chip on the new cards creat a unique code for every transaction, something that criminals have a difficult time counterfeiting as proven in Europe and Asia. This technology is not entirely new since Europe and Asia has started using this ten years ago according to The Hill. In the United Kingdom and France, in-store credit card fraud decreased by over 75 percent since introducing the EMV chip technology and it remained low as of date. In the United States, about $7 billion gets stolen every year and about $3 billion can be traced to counterfeit cards.
With eight million U.S. merchants expected to install the new machines to accept the EMV cards, it is sure to expect a fall of card frauds in the next coming years. It will be a good advice to call your repective banks about the new EMV cards if you still have not received one.
