What’s that new chip on my card? #AskTPS
TPS reader Reuben messaged us a great question about the upcoming change that will affect all of your credit cards. Your bank has probably already sent you a new card, but did you know why? Are my old cards going to work? What’s going on!
The other day I was at Gap and when I went to swipe my credit card (Delta American Express Platinum I might add!) the card reader told me to insert my card instead of swiping. Confused, I look at the cashier and said “It’s telling me to use the chip reader, where and what is that?” The cashier had me insert one end of my card into the terminal and my transaction was done. What is this? Why did this terminal require me to use the chip vs. swiping the card? Is this the future of credit card transactions?
Credit card fraud is very expensive to the card companies. That’s why they sometimes overreact when you travel to a new city and it triggers a fraud alert. Why? Currently, if a transaction is found to be fraudulent, the liability typically falls on the credit card issuer. Starting in October 2015, all merchants who have not updated their card terminals will be the ones responsible if a transaction is fraudulent.
At the end of the day, this is a great change that will make using credit cards much safer and will significantly reduce the amount of fraud that happens every day.
What is that new square on my card? It’s a computer chip that creates a unique code during each transaction that can only be used once making it impossible for criminals to reuse the card data if stolen.
How do I use it? No more awkward moments when you can’t swipe that card just right. Now, all you have to do is “dip” your card into the terminal, but expect it to take a few extra seconds since there’s an extra layer of security checks happening at the same time.
Do I have to sign? It depends. Depending on how your card is set up, you will have to either enter a pin number (similar to how you have used your debit card) or you will sign. Over time, it’s expected that the market will only use chip and pin.
Thanks for the question, Reuben! Since your bank has already sent you a new card, you’re all set for the upcoming transition!
If anyone has a question for TPS, reach out to us on Twitter @ThePerfectSwipe or email us at [email protected].
