About a month ago, I received an updated credit card in the mail, but this one was a little different than my old version. This version had a little chip on the front of the card. I began to notice that in some stores, they now required me to place the entire card inside the credit card machine and wait, as opposed to quickly swiping the magnetic strip as usual. What is the purpose of this chip and the new process?
I am sure you all remember the 2013 Target debacle where hackers stole the information from many customers. Shortly thereafter, this sort of thing was happening regularly. These instances cost the credit card companies and businesses millions of dollars and anyone who was involved stress and headache.
There HAD to be a better way to protect ourselves from hackers. The credit card companies came up with this new chip card technology, often referred to as "EMV chip".
This EMV chip will eventually replace the traditional cards magnetic strip. This chip will hold the customer information. This technology will make it much harder for hackers to steal your account information. The chips generate a code for every transaction as opposed to sending your information directly over to be processed.
Businesses will need to get updated credit card readers. For now, you will have the chip on the card as well as the traditional magnetic strip. After October 1, 2015, if a customer has a card with this type of technology and a business does not use a credit processing machine that will read it, the business owner is now liable for any type of fraud that occurs.
If you are a business owner and are using credit card processing, you should contact your credit card processing company and make sure that you will be in compliance by October 1. If you are a customer, you should be receiving your updated EMV chip credit cards in the mail.