$33 billion upgrade to the American credit card system is underway, and it’s supposed to help protect us all against fraud.
If you go to Target anytime soon, no doubt you’ll see new machines in place to process your new credit card equipped now with a microchip. The technology is an important upgrade, given the major data breaches that have occurred at several retailers over the past few years.
So what does this mean when you go shopping? Basically, you won’t swipe the magnetic strip on the back of your card anymore. Instead, you insert your card and wait a moment for it to process. A beep will indicate the transaction is complete
Your card will have a chip embedded on the front of it, which generates a unique verification code for each transaction to protect you.
“I don’t have to worry quite so much about what’s going on in my bank account,” Target customer Elan Pavlinich said. “So that always makes me happy.”
Stores in Europe have used the technology for years, but the United States was slow to make the change because of the big conversion cost: more than $2,000 per terminal.
“It was expensive, but it’s worth it for the guests who shop in our stores and feel comfortable,” Target manager Mike Richards said.
Most retailers are now trying to meet an Oct. 1 deadline. That’s when liability for fraud will increase for stores that don’t get the machines.
If you haven’t gotten your new chip-enabled credit card yet, it should come in the mail soon. For now, the new cards still have the magnetic strip because many retailers are running behind in making the upgrade. So, you can still swipe if necessary.
It’s important to note, while retailers are trying to meet the deadline, some won’t be ready in time. In fact, it could be well into 2016 before we see a complete change-over to the new technology.
The new technology is actually designed to incorporate using a PIN number along with the new chip design, but for now, the credit card companies are not requiring PIN numbers, even though it would make your transaction more secure. The concern is it will slow down checkout too much. For now, all that is required with the new chip card is a signature.