3 On Your Side: What The Chip In Your Credit Card Means For You
By Jim Donovan
PHILADELPHIA (CBS) -- Thursday marks the day stores are supposed to have terminals that can read the new computer chip credit cards. But many stores don't have them and many consumers have yet to receive the new cards. What does this mean for consumers and for businesses? 3 On Your Side Consumer Reporter Jim Donovan explains.
Ingrid Gonzalez is getting the hang of her new credit card. They're called EMV cards and have a built-in computer chip for added security. Instead of swiping, customers have to dip them into these new terminals. Gonzalez says, "With the other one you swipe it so quickly, this one you have to put the card, wait a little, until it tells you."
The chip creates a unique code for every transaction and doesn't transmit personal information. That's supposed to protect consumers from a data breach like the one Target saw in 2013 because the information is worthless to hackers.
Visa and MasterCard have set Thursday as the deadline for stores to have the new terminals or face new consequences. Matt Shulz, Senior Industry Analyst for CreditCards.com says, "They will bear the liability in case of credit card fraud and that's a big shift because in the past banks have bore most of that liability, so that's a big deal for merchants."
But a recent poll finds only 27 percent of retailers have the new more expensive card processors. Plus another survey says 64 percent of credit card users have not received the new chip cards yet.
Eric Brown recently got his in the mail. He says, "These being more secure, is kind of reassuring." Consumers who haven't received the chip cards can still swipe and won't be responsible for any fraudulent charges.
CreditCards.com believes most people will receive the new chip cards by the end of the year. While Visa and MasterCard have set the fraud liability deadline for October 1st. American Express will shift liability to stores on October 16th.
