Take your debit or credit card from your wallet. Odds are it’s a newer card and has a small gold chip in the lower corner of the card. That chip is the future of secure transactions and a possible end of credit card fraud. As of October 2015, all major U.S. banks and credit card issuers were compelled to include these chips on their cards and retailers are slowly rolling out new card readers for the new chip cards in their stores.
Dubbed “chip and PIN” the new safeguard is simply one more step to assure all involved that the person using the card is the person who owns the card. Simply put, if the four digit PIN you enter fails to match the information stored on the chip the transaction is declined. Depending of the local statutes this transaction failure may lead directly to an arrest if proper identification is not given.
The chip and PIN combination was agreed upon after years of testing by numerous security firms. Of the thousands of options they looked at, this “two-factor authentication” was deemed the best. While it is relatively easy for a crook to guess a PIN, it is much more difficult for them to fake the chip. Because while it contains a copy of your PIN the chip also encrypts much more information such as your name, address, account information and some proprietary data that links you – and you alone – to that card and account. To add an extra layer some institutions have you sign instead of (or in addition to) using the chip and PIN. Your signature is digitally stored on the chip and compared to the one you write at the point of sale. Talk about security!
Of course with the pace of technology only quickening, this method of transaction will only remain secure for so long. As those who want to find a way so often do, a way will be found to crack the code. But thanks to the level of security, this elegantly simple combination provides that day is far in the future.
So go on and spend with confidence. And when in doubt remember these instructions. Insert the chip card in the front of the credit card terminal with chip facing up. Wait for the prompts to guide you through the transaction before removing and sign when required! Just don’t forget to remove your card and take it with you… and look back fondly on the days of the easy swipe; but rest assured…you’re far better protected now.
By Bob Skrezyna for the 50 PLUS REPORT