An up-and coming change that is happening more and more frequently to credit cards is the addition of a chip rather than the traditional strip, meaning that transactions are now being processed with a chip reader.
Rather than swiping when making a purchase, credit card holders are now able to insert their card into the chip reader, which many banks state gives increased benefits to the individual. When using a credit card with the traditional magnetic strip, the data needed to process the transaction stays the same. This means that if somebody steals the information of a traditional credit card, they are able to retain the information and data needed to make as many purchases as they desire, and they can even duplicate the card. However, with the new chip, every time a credit card is inserted for processing, a new transaction code is created. This means that if someone attempts to steal card information through a machine that works as a chip reader, they are unable to gain the important data needed to fully steal and duplicate the credit card, protecting a user’s security.
Another benefit of using a chip credit card, otherwise known as an EMV standard card, is the fact that processing transactions internationally becomes significantly smoother. While the United States is just now beginning to adopt the chip processing system, other regions overseas, such as Europe, had been utilizing this system for about ten years before it reached the U.S. Globally, approximately half of all cards used are chip cards, and nearly 75 percent of machine readers process chips. Other locations besides Europe that utilize the EMV standard card are Canada, Mexico, Australia, Asia, and Latin America. When a user makes the switch to a chip credit card, they can travel without the concern that their card will not be processed when inserted into a machine reader during their time abroad.
One additional step that chip credit card users can take in order to maximize the security of their transactions being processed is to require a PIN number when inserting the card into the reader rather than a signature. Signatures are easy to replicate and there is a significantly higher margin for error allowed when signing for a purchase or transaction than with a PIN, where the exact number must be known in order for the transaction to be processed.
If a user happens to stumble upon an older reader that does not allow for processing of chip credit cards, it should be noted that a vast majority of the EMV standard cards still do have the traditional magnetic strip, in order to allow for processing in every machine. However, when at all possible, the chip reader should be used to process a purchase or transaction rather than the magnetic strip, and if the magnetic strip must be used, it is preferable to input a PIN number rather than a signature in order to ensure that a customer’s experience is as secure as possible.