I recently lost my debit card and was sent a replacement one in the mail. I didn’t take a good look at my card. If I would have, I would have noticed a tiny new addition on the left hand side. It wasn’t until I stopped at a local convenience store and was startled by a beeping noise. The card reader was asking me to insert my debit card in order to read the chip. Although I was confused at first, I had quickly learned that this was a new chip to help keep me and my card safe.
EMV: What is it?
Basically, these chips are supposed to better protect a person from identity theft. The old cards used to have a magnetic strip across them. That magnetic strip was a target for thieves because they’d be able to copy it since it never changed. Once thieves copied that strip, they would be able to replicate the data. Card chips are deemed to be more safe because every time a card with a chip is used, a unique transaction code is created that cannot be duplicated.
Protecting Against Criminals
The electromagnetic chip will of course not prevent all data breaches from ever occurring. But, they will make it harder for criminals to make a profit from what they steal. The experts who have studied these cards are hoping that they will help to reduce the amount of fraud that goes on in America. According to Credit Card News, other countries who have already implemented cards with chips have seen a lower rate of crime because of them.
Downfalls Of The Smart Chip Cards
There are also some downfalls to these chipped cards. First, not all stores are equipped to handle the new cards. This was especially true in the beginning when the cards first started to make their rounds. Stores had to buy new readers that would support the cards with the chips. That’s because the card needs to be inserted into a machine in order for it to be read. Stores who upgrade to the machine will be at a lower risk for fraudulent activities. It has not been enforced that all stores have these new fancy machines that read the EMV cards. The old card readers can still process a chipped card because it has a backup strip.
According to Merchant Maverick, however, there are penalties for stores that don’t have the chip readers. If fraud happens, that store and their processing company are completely liable for it. That’s because in theory, the fraud could have been prevented if the store would have had one of the card reader machines.
Perks For The Individual
There really isn’t any downfall for an individual to get a new card. Many banks sent out the new cards with chips to their customers. Those who get a new card because theirs was lost or stolen will find that their new card is implemented with a chip.
Banks are doing what they can to cut back on fraud. Fraud not only hurts the customer but it hurts the financial institution as well. Chip cards are also great because they help to put a person’s mind at ease. Anytime a person knows that they are less of a target for thieves, they feel better. This is especially true for the elderly who often fall victim to crime.
There was no cost to consumers for having these new chip cards, either. In theory, this is a great new plan in the fight against fraud. As time goes on and crime is able to be studied, experts will be able to determine whether or not these cards have been successful or not.
Jessica Kane is a professional blogger who focuses on personal finance and other money matters. She currently writes for Checkworks.com, a leading supplier of personal and business checks.