Chances are, you’re one of the millions of Americans who has received a new credit or debit card in the mail in the last few months (if not, you will soon!). It looks identical to your old card, but with one exception: it has a small chip on the front. These new cards are supposed to make transactions safer, but right now, many retailers aren’t equipped to accept them. The result is longer lines at the check-out counter as confused customers fumble with whether to use the chip or swipe their card as usual. So why we do we have cards that retailers can’t accept? The deadline for retailers to change to the chip-enabled payment systems was last October when U.S. credit card companies, including Visa and MasterCard, announced new liability rules. This meant that businesses had to switch over to the new technology or take responsibility for any costs incurred in the event of fraudulent transactions.
Chip cards use EMV technology (which stands for Europay, Mastercard, Visa), and are more secure than traditional swipe cards because they create a unique transaction code that cannot be used again. Cards with only a magnetic stripe use the same transaction code over and over, which makes it easier to skim information. Despite the now passed deadline, The Strawhecker Group (TSG) released a survey in February estimating that only 37% of merchant locations were EMV ready.