Since October 1, you may have heard that merchants started adopting to the new “chip and pin” credit card standard called Europay, MasterCard, and Visa (EMV), advanced by the payments industry to both enhance the security of transactions and facilitate international payment processing. It turns out, as I can attest, that traditional “magnetic strip” cards are convenient to use but not too secure. What you may not know is that this technology has been in place abroad for several years now and the U.S. is finally catching up. Today, we’ll discuss what the “new” card means for you.
While you may have received a new chip-enabled card in the mail recently, many retailers aren’t yet equipped to handle the new method of processing Point of Sale (POS) transactions. a POS is a terminal that is either attached or directly embedded in a cash register. What’s the difference? Before, you or the cashier “swiped” the card to pay at the POS terminal (left to right or up to down depending on the orientation). Now, you or the cashier must insert your card in a slot on the bottom, hold it there, and wait for the transaction to process.
So, what does this mean for you? While retailers and other vendors (think taxis) are supposed to be adapting to the new system, many have not yet. And, they will need to because if they don’t, they may be held liable for fraudulent transactions. For consumers alike, there’s going to be some confusion for the time being, but presumably there will be a grace period while industry catches up and the new method becomes more common place. Everything else you have come to love with using credit cards, such as earning points, miles, or cash back should remain as is. Liability protection for fraudulent transactions should also remain the same for you – typically zero.
What does the credit card reader look like?
The new POS systems don’t look terribly different from what you are used to. If you look at the picture to the left, you will notice that the card is inserted in the bottom and held there. There’s still a swiping option to the right in this model, but as industry catches up, I imagine that the reader will look a bit different.
For now, getting used to paying with your credit card might take a bit of time. And, speaking of time, one complaint about the new method is that it takes longer to process than swiping. Whether that will speed up in the near-term is unknown. But, if you have already been using Apple Pay, Android Pay, or Samsung Pay to pay by phone, this shouldn’t impact you. These are definitely interesting times for consumers and paying for transactions.