The magnetic stripe credit cards consumers currently use are gradually being replaced by new “chip-enabled” credit cards, a new standard to better protect against fraud. This primarily affects businesses, as they have to upgrade their credit card networks to this new “EMV” (Europay. MasterCard, Visa) standard to read the new cards more securely. Businesses can still read the new cards with their old systems, but if they do, they will be liable for any fraudulent transactions; if a customer uses a magnetic stripe card, the bank is still liable, not the business.
The replacement of consumers’ cards will be gradual; if one still has a magnetic stripe card, one can continue to use it. If one receives a new chip-enabled card, one can use it anywhere, including businesses that have not yet upgraded, but the process for making a transaction at the upgraded card readers is a bit different. “According to the Electronic Transactions Association, the high-tech chip creates a unique code for each transaction, making it difficult for criminals to duplicate consumers’ information. The new cards have to be inserted and then held in a card reader, which then uploads the information to complete the transaction.”
This new chip technology is already in use in Great Britain and has significantly reduced credit card fraud there. It is not a magic bullet. Consumers should continue all usual precautions and should remain vigilant for and immediately report any indications of fraud.