I’m standing at the checkout line ready to pay for a few grocery items I had stopped for on my way home. Once the last item is scanned, I dig through my wallet and fish out my debit card. As I swipe my card, I’m interrupted by a buzz and an error message on the screen. “It’s a chip card, “ the cashier says without looking up. “You have to put it in the bottom slot.”
To be honest, I’ve been using this card for months and still can’t seem to remember that I’m not supposed to swipe it. I’m a creature of habit; even the slightest change can throw me off.
What’s the deal with this chip card? The interaction at the store sparked my curiosity and got my Google thumbs tapping. Here is the breakdown of what I learned about the new chip cards.
What are EMV (Chip) Cards?
EMV cards, or chip cards, are the newest and safest version of your debit and credit cards. Created by Europay, Mastercard, and Visa (hence the name EMV), chip cards look like your regular card except for the small pushpin sized chip on the side.
This chip isn’t limited to just Mastercard or Visa. In fact, you’ve probably had this chip on your card long before most stores started accepting them.
We all remember that Target scandal, right? The one in 2013 where 40 million credit and debit cards were hacked. While there have been many other companies with a similar breach, Target seemed to garner the most media attention. Utilizing the chip cards will help protect you from potential fraud breaches similar to the Target scandal.
How to Use Them
If you want to avoid that irritating buzz noise, it’s time to retrain your brain to insert instead of swipe. This is a lot tougher than you think. I instinctively swipe as soon as the total pops up on the screen.
If you haven’t seen it yet, there is a small slot at the bottom of the card reader. When prompted, insert your debit card chip-side-first into the slot and leave it there. The machine will walk through steps to approve the amount and enter your PIN. Once the transaction is approved, the machine will tell you to remove your card.
The process takes a little longer than the swipe method, so get ready for some small talk with the cashier.
Why They’re Safer
You may be wondering how a chip is safer than the old traditional way of using a debit card. I was curious about the same thing.
Before the EMV cards, if you wanted to make a purchase, you swiped your card using the magnetic strip on the back. Each time you did this, a code was sent utilizing all the necessary information to complete the transaction. The info is stored inside the strip of your card and the same code is used for every purchase you make.
With the EMV card, the chip creates a new and unique code for each transaction you make. This means that the code sent from last week’s grocery trip is different from the code sent when you bought your movie tickets last night.
By changing the code with each transaction, it makes it nearly impossible for hackers to steal your personal information. It’s like trying to unlock a door with an old key after the locks have been changed.
Who Does it Impact and When Does it Start
While the higher level of protection can help you sleep a little more soundly at night, the reality is you are never financially responsible if your identity is stolen. The banks have always held complete liability in the case of a breach and will cover the cost of all stolen dollars. However, as of October 1st, 2015, the liability has changed.
Merchants were given a deadline of October 1st, 2015 to adopt the chip card at their registers. If a business has a breach while using the chip card, the bank assumes full liability. However, if a merchant is not currently utilizing the chip option, the bank passes responsibility onto the business and assumes no liability. This has been referred to as the Liability Switch.
When will we start to see this change at the gas pumps? Gas stations have until October of 2017 before the Liability Switch goes into effect for them.
Don’t worry. Like I said before, we as the consumers are never held liable in the event of a security breach. While the process may be a major headache, either the bank or the merchant will make you financially whole again.
Where to Use Them
Now that we know how the chip cards work, where can we expect to see them? As of right now, only about 50% of businesses are accepting chip cards. Due to the cost of completely changing systems, most small businesses haven’t been able to make the change. If a store does not accept EMV cards, you can still use your card the traditional way by swiping it. However, the majority of big name stores are accepting them. Yes, Target is on that list.
If you’re an online shopper like me, there is no added protection for us. Since all we are doing is entering our card information at checkout, the level of security has not changed.
I’m guessing it won’t be long before there’s a solution to protecting our online purchases. Until then, we’ll just have to shop at our own risk.
While we are never completely safe from identity theft, every stride toward protecting our information is a step in the right direction.
How do you feel about the new chip cards? Do they make you feel safer shopping at some of the stores that have already been breached?
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