BBB: Watch for New Technology at the Cash Register

New Option Offers Stronger Protection Against Fraud

A crucial technological advancement is appearing in consumers’ wallets and greeting them at the checkout counter: “smart” credit cards and merchants’ card readers. The chip cards, known as Europay, Mastercard, and Visa, (the three companies which originally created the standards) are also called “EMV cards”, “chip-and-pin cards” and “chip cards.”

This new generation of anti-fraud credit cards contains a microprocessor chip that makes in-store transactions more secure by generating a unique, one-time code that is needed for each transaction to be approved. If a thief gets hold of your card, reproducing the information will be much more difficult.

“With your personal and account information stored in a small electronic chip embedded in the card, it’s a more secure way to store information providing better protection against credit card and identity theft”, says Ran Hoth, CEO/president of BBB Serving Wisconsin. “While the change won’t solve all security problems involving credit cards, it does add additional security which is a good thing.”

Merchants both large and small have an incentive to update their point-of-sale terminals to accept the new EMV cards by October 1st, when liability and losses due to fraudulent transactions will shift from the card issuer to the merchant. So you’re likely to see a lot more of the new card readers popping up over the coming months.

Unfortunately, the EMV technology does not yet stop fraudulent use of a smart card in No Card Present (NCP) commerce, such as telephone and internet purchases. The EMV chip technology is intended to combat card-present fraud in stores.

Many cards will still have a magnetic stripe on the back containing information. That stripe is a legacy that enables consumers to use their cards in stores and countries that do not yet have EMV technology. Once those stripes are phased out as they have been in other countries, it will make things considerably more difficult for credit card thieves.

The BBB Serving Wisconsin has some tips for the use of EMV cards:

Ask about receiving an EMV card - Financial institutions continue to replace existing credit and debit cards with the smart EMV cards. If you have not yet received one, contact your financial institution.

Don’t forget your card – You must leave your card in the reader until prompted to take it out. You’re going to sign for the purchase, if a signature is required, while the card is in the reader. If you’re in a hurry, you may forget to take the card out of the reader.

Carefully review financial statements - This is vital all year long, but more especially when you use your cards a lot. The moment you spot an error or unauthorized charge, call your financial institution immediately.

Like us on Facebook and follow us on Twitter.

For an online version of the story click here