If you’ve noticed something a little different on your new credit or debit card recently, you’re not alone. This new piece of technology is a small microchip that works to prevent credit fraud by validating transactions. Chase Bank’s Nikki Atkins says, ““For a customer, it’s just more secure. It adds another layer of security by making it more difficult to replicate the data on the card.” The way this card works is if a merchant does not have the chip-embedded technology but the card that was used does, the merchant is held accountable for credit fraud, not the consumer.
It’s no surprise that America is the only country with growing credit fraud; Europe and other places around the world have already been using this microchip technology on credit and debit cards for decades before us. However, Chase Bank says by the end of 2015, 70% of cards will include this chip.
Some questions were asked of the microchip such as the following:
- How do the microchips work?
- How did this switch in cards come about?
- Will shopping online be altered by this switch?
- Will this switch be more vital later in the year, during holiday season?
- How has the switch to chip-embedded cards make the consumers react?
The answers to your questions are simple. The card works by producing a one-time only code and this code validates transactions so that it defends and protects against unauthorized uses of the card. Unauthorized uses could potentially lead to fraud so in short this chip is preventing credit fraud from happening. There is far too much fraud happening in today’s world, the switch was not necessary, however, it is what’s best for the consumer. When online shopping with your new card, have no worries. This switch alters nothing when it comes to doing shopping online, you just shop the way you’d usually shop.
As holiday season comes around the corner, this switch will become more important to shoppers. One thing to stress is that on October 1st, a liability shift will take effect. This means that if a consumer is still using an old card that does not possess the chip, to make transactions they simply just swipe their card and add in a signature, however, this holds them accountable for transactions that are made when they purchase a card that does have the chip but swipe it to make transactions. By the time Christmas roles around though, because customers have reacted so eager and positive to the card switch, it is believed not many people will have an old card. Security is very important to a consumer, and that’s what the microchip-embedded card guarantees.