You may not have even noticed, but if you were sent a new credit card this year, it likely came with a little chip...the shiny thing above the first four numbers of your card. It means security, at a time when credit card users need it the most. As Stephanie Ericksen of VISA told us, "Counterfeit fraud is about two-thirds of the fraud that we see in stores today."
Credit card fraud stories are an everyday occurrence. But the new chips are like having a little micro-computer on your card. Ericksen says, “By creating these unique one-time codes, if a criminal steals them they cannot use them to create a counterfeit card or do counterfeit fraud." It confirms to the bank that the person using it is you, and that the transaction is legit. Other countries have had this for years, and they saw counterfeit fraud decrease more than 80%. When the rest of the world went to chip, the scammers came here. Now the U.S. is playing catch-up.
70% of us will have the new chip cards by the end of this year…but it’s a 2-part process. While banks are issuing the new cards, merchants have to get the new chip readers. At her new rum cake bakery in Reno, Bert Lawton is ready. She was an early adapter to the new system, because, as she told us, “People use a lot more credit cards now than they do cash." At her “Rum Cakes Etc. By Bert” store on west Moana, she wants her customers' personal information safe. Bert is a local realtor, but she's better known for her rum cakes…made from an old family recipe. For years she made them at home, but when she got up to making 100 a week, it was too much. Less than 2 months ago, she's opened her first bakery. She also knows, the more secure people are, the more they'll spend. As she told us, “It’s easier for my customers to purchase items, and a better way for them to keep track of their money."
There’s only one reason Bert and merchants like her are not eager for this changeover: come October 1st, fraud liability shifts from the bank to the merchant…so when there’s a fraudulent transaction the store takes the hit. And the cards are not a silver bullet to stop all fraud. They can still be stolen...a thief can forge a signature. And online sellers don't have your physical card to read the chip. But still, it’s the first thing Bert wanted, “Because I wanted to be prepared for, I hope, the wave of people buying my rum cakes!"
And how long will your current, non-chipped cards work? Quite a while, since it may take years for everyone to have a new card. But there's a caution…con artists are well aware of the conversion, and may be on the prowl capturing your data from old cards…while they can.
