Chip Technology Makes For Safer Purchasing
Canadian Credit and Debit Cards to be Chip Enabled by 2011
As part of an industry wide initiative, credit card and debit card companies are migrating to chip technology to provide customers and merchants with an enhanced level of protection against fraud.
According to a recent Canadian News Wire release, Tracey Black, Program Director, Kitchener-Waterloo Industry Chip Trial stated “ The chip card is the next evolution of credit and debit cards. Merchants and consumers have much to gain from the migration to chip as chip cards and chip terminals make a secure transaction system even more secure”
Cards with embedded chip technology are already in wide use around the world and the technology has proven to help reduce fraud by making it more difficult to duplicate a card or make purchases without authorization. There are some important facts consumers should know before 2011, when the old, magnetic strip technology of today’s credit and debit cards is eliminated from circulation in Canada.
Chip Cards are More Secure
A chip card is a debit or credit card that contains an embedded computer chip, also called a microchip, that stores account information and a Personal Identification Number (PIN), in a secure form. The embedded computer chip encrypts a customer’s account information and PIN, making it difficult to duplicate the card or use it without authorization. Card holders are required to enter a PIN for all chip card transactions so purchases are always completely secure.
Chip Card Transactions are Easy
When making a transaction at a chip terminal, a customer inserts the credit or debit chip card into the terminal. The customer then keys in a PIN for purchases made at that terminal. The card stays in the terminal until the transaction is complete. A signature is not required for credit card purchases. When the transaction is complete, the customer is prompted to remove the card from the chip terminal.
Magnetic Stripe Cards will be Replaced by Chip Technology
Chip cards will continue to have a magnetic stripe on the back for several years to come. This will ensure that chip cards will continue to be accepted in other countries that have not moved to chip technology. At retailers without chip terminals, cards will continue to be swiped and a signature will be required.
Customers can't Keep Current Magnetic Stripe Cards Beyond 2011
After the conversion from magnetic stripe to chip card has rolled out in 2011, all magnetic stripe cards will be deemed obsolete. Chip cards are accepted anywhere in the world where credit and debit cards are accepted today.
With the conversion to chip technology well under way, it’s important to take note that each financial institution has its own timetable to provide customers with new chip cards and many have completed the conversion already.
Chip Technology
|
What do you think about this article?
More in Business & Finance
Latest Articles