Although major U.S. banks have been
rolling out new, secure smart chip debit and credit cards for months, users
have yet to experience the impact of this. Experts say typical consumers will get
confused and may even be hesitant when first attempting to use these new smart
cards. The new smart-cards contain a PIN (personal identification number) and a
computer chip that can be read by a new point-of-sale terminal.
As a result, customers may choose to
rely on the less secure magnetic stripe also on the new cards for in-store
purchases, or customers may turn to mobile wallet alternatives such as Apple
Pay or the upcoming Android Pay. This method will allow them to skip the credit
and debit card experience altogether. The PIN and chip concept may be confusing
to consumers because they are so familiar with the magnetic stripe method.
Smart cards are much more secure
than magnetic stripe cards. According to the Europay MasterCard Visa (EMV)
Connection website, there are currently more than 3.4 billion chip cards in
circulation that are widely used in 80 countries outside the U.S.
Smart cards are embedded with a
computer chip that is read by a new generation payment terminal. As with older
cards, payment information is transmitted electronically over a payment network
to confirm a customer has available credit or funds in a debit account.
are a few reasons that consumers might get confused or give up using the smart
cards. First, it takes longer by at least a couple of seconds to make a payment
with a smart card rather than a magnetic stripe card. Also, the payment
confirmation will vary by the type of payment terminal or a store's required
payment procedure, which could cause confusion. Some new terminals that are
designed to handle smart cards will emit a beep that a transaction is complete,
while others will flash a light or a text message on a screen that signals approved.
In some other cases, a store clerk will verbally confirm that the payment is
complete, which will depend on whether the sales clerk has received proper
training. The current deadline for the new smart card is October 2015; however
gas stations have until October 2016.
Although the new smart cards may be
confusing to users they offer a lot of great benefits. Some of the benefits are
Consumers will experience peace of
mind knowing that their card information is secure. They will also be able to
use cards anywhere in the world.
Merchants will realize fewer
fraud-related charge-backs due to stolen cards and skimming. They will also
increase customer satisfaction with their international patrons. And they will
be ready for the future of mobile wallets and other innovations.
Card issuers and payment processors
will benefit from a reduction in counterfeit card fraud.
at Software Solutions, we’ve researched computer integrated EMV readers and in
our opinion the market is severely lacking in hardware and software. We’re
expecting major issues with vendors such as restaurants. Are you ready for this
big change in charging items? How do you think this will affect you when you