A new generation of credit and debit cards, with a chip embedded its face, will be hitting the American market by the end of the year. Smart Card Alliance estimates that there will be more than 600 million cards, around half of the 1.2 billion cards in the US that will be distributed to the consumers by October 1, which is the deadline set for the replacement of the old cards.
With the record breaking number of card fraud and data breaches, the use of the new chip and PIN cards is aimed at minimizing, if not totally eliminating theft. With the old ones bearing a magnetic strip, the strip contains the information that the thief will be needing to make purchases using your card. That information remains the same enabling the thief to use it over and over again.
On the other hand, the chip creates a new transaction code every time it is used and using that code for the second time is not possible, thereby protecting your card from unauthorized purchases, even if it has been stolen and a thief gains access to it. Matt Schultz, analyst for CreditCards.com, says "It's kind of like stealing an expired password. ". Another difference is that the presence of the chip makes the card more difficult to counterfeit.
While the microchip embedded on the cards may offer a great solution, IT Professional Ryan Stephen, sees it as a temporary fix. "Absolutely anything is hackable. If somebody can program it, somebody can hack it. It's just a matter of how difficult hacking it would be, and if it's worthwhile to be able to hack it, which with money a lot of times it is, "he says.
With the new cards expected to arrive less than a month from now, what others things do consumers need to know about them?
1. Once the new card has arrived, cut the old card.
2. You are not liable in case of fraud. The same zero liability protecting you with the present credit cards will also protect you with the new cards.
3. Train your fingers for the dip. Unlike the old cards with magnetic strips that are swiped, the upcoming credit and debit cards will be dipped into a machine , just as you dip you're your card in the ATM, though the transaction may take a little longer to process. Many of the terminals accepting chip cards will be equipped and will allow you to pay with the "contactless" technology using your iWatch, your phone, or an even smarter credit card.
4. Many of the recent cards have both the magnetic strip and the chip. "That's largely to ease the transition from mag to chip, "says Schultz.
5. If transactions are taking longer, do not panic. The terminals will act as your guide.
6. If you will be using the new chip card overseas, a PIN will be required.
