Credit card chips aim to increase security among users

In recent months, banks and credit card companies have made the switch from regular magnetic strip cards to those with an encrypted chip in them, unique to each individual card.

These cards are also known as EMV (which stands for Europay, MasterCard and Visa) cards. The recent requirement of all cards to have chips is the result of an attempt to make bank accounts safer and prevent hacking. The magnetic strip has been used by many places around the world, especially in Europe, for decades and is very easy to duplicate.

The new chip-based technology is supposed to make account data harder to steal, making it a safer alternative.

“Europay is using this already. And when you look at the amount of fraud that happens, in the U.S. alone, the U.S. sustained 48.2 percent of the world’s credit card fraud last year,” Michael E. Busing, the associate dean of the College of Business, said. “Obviously, Europe has already got this figured out. It’s proven it is secured there.”

The U.S. has been reluctant to make the switch from solely magnetic cards to those with chips. However, the new cards do still include the magnetic strip.

“You get entrenched in technology and the switching costs are huge,” Busing said. “So when you look at Target, they spent $100 million to switch over all their card readers. So there’s certainly a cost involved. It’s sort of a trade-off. Banks are looking at: what’s the cost of conversion versus the amount of fraud we’re seeing.”

There is also some doubt about how quickly transactions with these chip cards will be able to be completed.

“When I used it at Target, it took a very long time for the transaction to go through. That’s one of the things people are complaining about,” Busing added. “You can imagine … we’re getting into the busy holiday season, and if transactions start taking 20 to 30 seconds, you’re gonna get a backlog of customers.”

The deadline for stores and businesses to adopt the chip reader machines was Oct. 1, but not everyone has made the switch to the machines. However, many businesses have, including Wal-Mart.

Brent Cosner, operations assistant manager of the Wal-Mart on Burgess Road, noted that he’s already seen an increase in the use of the chip cards and little to no issues with them.

“The only issue you could say is the public not being aware that these chips can complete these transactions,” Cosner said. “But as far as complications with our machines, there hasn’t been an issue.”

JMU has adopted these machines as well in order to comply with the Payment Card Industry Security Standards Council.

Linda Combs, Director of the University Business Office, added that the PCI council has a certain set of rules and regulations for people who use its card brands. These brands include Visa, MasterCard, Discover, American Express and Japan Credit Bureau.

“So, because of the PCI, we knew the encrypted cards were coming and the swipe machines on campus that we use in various departments had to be updated,” Combs said.

The business office at JMU updated the machines last year in order to be ready for the new chip cards. The machines are ready to be used around campus.

Combs noted that these chip cards should improve security.

“They’re not foolproof, but they are supposedly more secure,” Combs said. “And we do everything to make our sites and machines [PCI] compliant.”

Contact Alyssa McBeth at mcbethab@dukes.jmu.edu

 

Alyssa McBeth | contributing writer | Posted: Monday, November 9, 2015 3:59 pm

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Posted in EMV

Author: revisedcode

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