If you recently opened your mail box and saw that you received a new credit card, you might be asking yourself why that happened. First of all, it did not only happen to you, banks from all over America have been sending these new cards which appear to be chip-enabled and for them to work, you need to insert and hold them into a credit card reader.
The cards do not really look different from what you had until now, but you might have noticed that they have a new chip on the front: quite small and metallic. These chips are called EMV microchips and they work like a computer. They encompass all your payment data and whenever you buy something, they will generate a unique code that will reflect the reason of purchasing.
Not many people have received these cards yet. It was estimated that 3 out of 5 people from the 1000 who were surveyed by ACI Worldwide have yet to receive their cards. What is also important to know is that 32% of these people have no idea why the U.S. is moving away from its current credit cards and to a new system.
We will update you with the latest information, also pointing out our suspicions along the way.
It seems that the U.S. is the last of the major countries that are moving away from the current system. The U.K. is officially the first one to have adopted this new system, which will soon be known as the EMV standard.
The EMV standard was named and developed by the big names in the industry: MasterCard, Visa and Europay and it requires every card to have one of these computer chips. The chips will generate a unique code for every transaction and it has been deemed safe enough so that thieves do not steal credit cards and use them in shops.
We do not actually see how this system can prevent our credit cards from being stolen, since we do not yet know how these codes will be generated. Are they going into a computer? How would that stop anybody from stealing our data? Are we going to receive them via SMS, mail or a device given from our bank?
Either way, it looks like the U.S. has fallen behind in chip development, having adopted payment systems from different countries since 2006. It also seems that we are behind in adoption rate. While Western Europe has already adopted the new system in 84% of the cases, the U.S.’s absorption rate is down to 7%.
Photo Credits techwireasia.com