Chip cards are here

As of October 1, 2015, consumers would have their chip cards and retailers would have the machines that read them. Well, everyone is working towards this goal, but they are not there yet. Just this week I got a notice from one of our card companies saying that they would start issuing the new cards starting in January of next year when they renew them.

The only consequence seems to be that if retailers are unable to accept them before October 1, they could be liable for fraud. It seems that the United States is far behind all other countries in the use of this technology.

So what’s the problem with chip cards? When using a chip card, your credit card number is not transmitted, but rather a combination of random numbers is used. The theory is that if your credit card information is intercepted, the thief won’t get your real credit card number.

When you use your chip card, you don’t swipe it like you used to. Instead, you insert the card into a reader and leave it there until the transaction is complete. You may also need to sign as before, depending on your credit card company’s requirements and rules. There is no doubt that a chip card is more secure than a magnetic stripe card. However, for a time credit cards in the United States will have both the chip and the magnetic stripe. True security should start to come when we can remove magnetic stripes from all credit cards.

So does your new chip card provide additional security for online purchases? The answer currently is no. However, I think online credit card shopping is going to change for the better. It could come in the form of card readers attached to our laptops or desktops. Or maybe payment companies like PayPal® have the answer.

For mobile devices, Apple® Pay and Android® Pay are two new options for paying for items using your smartphone. This is like your smartphone taking the place of your credit card. Both are used with pin numbers and fingerprints. It offers protection in case your phone is lost or stolen. Time will tell if these two new technologies are successful or not.

I think it would add another necessary level of security if we had to use a pin number with chip cards.