Are you confused about the new chip card rules?

Posted on Thursday, February 2 2017 in Financial Planning Tips

Credit Card Chip – Credit Card Guidence in Sarasota Fl.You are not alone; many consumers are confused about how to use their new chip card. Questions you may ask yourself. What is chip and PIN? What is chip and signature? If I use a debit card, do I have to use a PIN or will they allow me to use my debit card as a credit card transaction without a PIN? If I use a credit card, do I need a PIN? What do I do if a merchant has not upgraded to the new terminals and I have to swipe my card? Will I be liable? Will the business or the merchant have to take responsibility for fraudulent transactions?
How to tell if you have a chip card

The microchip is implanted along the front of the card and is used to authenticate chip card transactions. The card may look exactly like the card you had before, except it will have a computer chip. The chip is EMV, which stands for Europay, MasterCard, and Visa. Due to data breaches, US migrated to this new technology to reduce fraud. The chip embedded in the card is supposed to make credit card transactions more secure. Do you agree? I think so, but it depends on how you use your new chip card.

By now, you should have received your new chip cards for your MasterCard, Visa, Discover, and American Express accounts.

Unfortunately, I noticed many companies are not sending out the new chip card until your credit card is about to expire. There goes that added protection!
Who is liable for fraudulent transactions?

The shift to the new chip card requires merchants and financial institutions to add new technology in stores and must comply with new liability rules. If retailers and small businesses do not comply with the new chip card rules (upgrading and using new chip-enabled terminals), they could be liable for any EMV credit card transactions that are fraudulent. This is a struggle for small businesses that have to come up with the money for the terminals and is an added cost for small business who may already be struggling.

For you, the consumer, it means you have to activate a new card and learn how to use the new system. You will need to be wary of any businesses that make you swipe your card instead of using the chip card reader. These outdated terminals will be vulnerable to hacking. I am still surprised how many businesses do not have the new terminals that accept a chip card. Some businesses are using the new terminals, but have placed a note in front of the chip card reader that says it does not work. You may ask, what is the point of having the new terminal if businesses are not going to use it? You may think it is the businesses fault, but the holdup is getting the new software and the certification to use the new terminals.
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Are EMV cards more secure?

Women talking about credit cards – Credit Card Guidence in Sarasota Fl.Well, there are limitations with the new card. Online transactions will not be protected from a thief. It prevents them from making a copy of the card but they can still steal your online payment information. They are not 100% safe unless they require a customer PIN. Which means you will have to remember every PIN for every credit card or debit card you use.

Credit cards can use the chip and sign, but some experts say that it is still not secure, the chip and PIN is the best way to help prevent fraud. There are two ways to use your card, chip and signature or chip and PIN. Chip and signature is when you use your chip card and it is confirmed by signature. Chip and PIN is when you use your chip card and input your PIN into the terminal.

Almost all Bank debit cards are requiring your PIN to be used at most retailers, which can be a pain for the consumer if you do not know your PIN for each card. This can cause many consumers to walk out of a store because they cannot complete their purchase.

Just remember that if you use a debit card you may have to use a PIN. Some Merchants may allow you to use the debit card without a PIN and run it as a credit card transaction, but this is not common.

This adjustment can be overwhelming for the consumer and for small businesses. It is time-consuming and costly for the business, but it will be helpful because it may protect consumers from fraud. Change can sometimes be a good thing if implemented correctly.
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