The Pathway to Better Security: Smartcard Transactions
Fraud-resistant payment methods have been around in Europe for many years and now America has finally come around to bringing the technology to the states. Europay Mastercard Visa (EMV) represents a global standard for ensuring the security of chip-based credit and debit cards.
Smartcard transactions use a microchip inside the card and implement a PIN system for added security instead of the widely used magnetic strip. The difference with this type of card is that cardholders would insert the new card into the reader instead of the normal quick swipe method.
The execution of this secure payment method has been slow going in the United States until the recent data breaches. A wave of implementation will be seen in years to come because cost is no longer a roadblock for financial institutions.
The cost barrier is now on the retailers who would need to buy the new readers which can cost hundreds of dollars each per machine. The benefits for retailers will outweigh the cost because it can drive in more customers who would be willing to pay with this new card technology.
In Iowa, retailers like Casey’s General Stores plan to use the EMV system, but do not have a firm date as to when they will be releasing the payment method in their stores.
The EMV system is not in high demand to be released in Iowa right now, but in 2015 it will be more common for financial institutions to distribute the cards needed for the technology as well as retailers.
Quick Facts about EMV:
The United States holds ¼ of the world’s credit cards, yet Americans bear 50% of global credit card fraud
Provides increased security for fraud resulting from counterfeit, lost or stolen cards
All major credit card companies (MasterCard, Visa, Discover, and American Express) have announced plans to issue EMV-cards
Makes it difficult for anyone but the rightful owner to use the card
Lincoln Savings Bank wants you to be informed when it comes to new technology that will affect your future. We will be giving you more information about EMV as updates become available regarding the progress of implementation in the United States.
Lincoln Savings Bank, Member FDIC