Chip card technology enhances data securityDate posted: 9/2/15 08:30:00 AM
New chip card technology has introduced enhanced information protection for U.S. consumers and merchants. This smarter technology provides better cyber crime prevention and bolsters your card against some of the advanced infiltration techniques now being used by hackers.
Financial institutions are issuing updated Europay, MasterCard and Visa (EMV) payment cards that are implanted with encrypted chips. Conventional in-person credit card purchases require buyers to swipe their magnetic stripe cards through a point-of-sale (POS) system and then sign their name. However, without the additional layer of security provided by chip cards, hackers have been able to duplicate credit card information pulled from these POS systems. Chip card technology creates a one-time transaction code per in-person purchase, which makes duplication and card copying very difficult.
"Many credit cards in the U.S. will have an EMV chip in place by October 2015."
Data from Barclays indicated that U.S. citizens represent 47 percent of all credit card fraud victims around the world, despite only making up 24 percent of the total users of credit cards, according to Quartz.
Criminals targeted American consumers because federal laws had yet to enforce stronger security measures that were commonly in place in other nations. However, many credit cards in the U.S. will have an EMV chip in place by October 2015. As we move into 2016, many financial institutions will release new chip cards to their customers, although some banks may roll out the new cards as customers' current cards expire.
The new cards will largely look and feel the same as the cards consumers are used to, except there will now be an embedded microchip that adds extra data security. Many merchants will update their POS systems to accept both magnetic stripe and chip cards. Chip-enabled terminals will allow the chip cards to encrypt the data shared during each in-person transaction. This means hackers will be much less likely to access full payment data from payment terminals.
Fortunately, these new cards are increasingly coming into circulation, and most consumers can expect their new chip cards to arrive in the months ahead, free of charge. Once activated, consumers can be sure they have access to the latest information protection technology and are taking every precaution to keep their banking information private.
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