Money and the technology associated with it is changing all the time. In Europe, the latest credit card advances mean that your credit card now uses an interesting new system called dynamic authentication. This is a system whereby every time you make a transaction on your card the data is stored on a static magnetic strip on the back, with an embedded chip. The credit card chip has been developed as a way to stop credit card fraud and also to help try and track down fraudsters who make fraudulent transactions.
Nothing is safe from fraud of course, but the idea behind this is that with a credit card chip, once the transaction has been made the data stored is useless to a criminal. Experts suggest that this will cause far fewer problems in the future and may even help them to track down fraudsters and criminals who are stealing other people’s identities and trying to make illegal purchases on their credit cards and gain access to their bank accounts.
If You’re Planning an Trip Abroad
If you’re going to be planning a vacation or business trip outside the USA then well before you travel you must write and request a chip and pin card from your bank. In previous years if you were traveling to Europe or the UK, shop owners and restaurateurs would be able to manually process payments if you didn’t have a chip and pin card, now however, more are refusing to do so, so it is better to be set up with one before you go.
Getting Used To the New Technology behind the Credit Card Chip
Previously, if you were using a card to make a purchase in a shop, the card would be swiped through a machine to make the transaction. Now, with the credit card chip, your card will be placed into a “reader” and you’ll put in your pin number – the amount you’ll need to pay will come onto a digital screen and you’ll pay in one easy step. The card will stay in the reader until the payment is made and then you’ll see on screen instructions to remove it. You’ll get a printed receipt for your records and your accounts, you should keep this as proof of your purchase and always make sure to shred or dispose of it carefully when the time comes as there may be printed reference to your credit card details on it.
How Does It Work – What Is The Technology Behind It?
The credit card chip uses a form of technology called EMV – otherwise known as EuroPay, Mastercard and Visa as these are the three companies behind the development. Already in the USA many new cards contain EMV technology but can’t be operated by chip and pin and still need a signature to authorise them. This is mainly because the changeover to chip and pin is still being undertaken – naturally this is something that takes a lot of time and not every store or shop will be able to have it in operation straight away.
Visa and Mastercard have also developed technology to make EMV cards useable in situations such as online shopping where the card will not be present at the transaction and you have to manually input the details.
The general consensus is that the credit card chip is a good measure to stop credit card fraud –or at least to make it harder for criminals to be able to make fraudulent transactions. It may even make them easier to trace, too.
By law, all shops and merchants must have upgraded their systems to chip and pin technology by October 2015. Up to this time, any losses that are made because of fraudulent or bad transactions occurring will be picked up by the bank or financial institution associated with the card. After this time, if a merchant then processes a payment that is fraudulent will be responsible for any monetary loss resulting because of it.
What Happens In The Mean Time?
For now, as a consumer you carry on as normal. Over the next year or so you will be issued with your new card and you should start to be able to use it as more shops and outlets roll out the new system and update their technology. If you’re shopping abroad in Europe you may need, as previously mentioned, to ask for a new card to be sent to you that means you can shop in safety while you’re on vacation or on business – as if you travel without one you may find it near on impossible to pay for goods and services you purchase, if you don’t have a ready supply of cash with you, which might be something you don’t feel comfortable doing.