Although credit cards are now protected by computer chips, retailers say that this is not of great help neither for customers, nor for retailers, as they are compelled to spend approximately $35 billion.
Most banks are now releasing credit cards that require a signature instead of a PIN code. This measure is not agreed by the National Retail Federation, who claims the retailers will spend large sums of money on software. Apart from this, they are not safer, as data would still be vulnerable.
This new equipment, called EMV, was created in order to offer better protection against fraud. However, statistics made by Software Advice revealed that 62% of 200 consumers didn’t have a EMV credit card yet.
“Indeed, in many cases it provides no significant benefits either to the business or to the business’ regular customers. It is merely an additional expense small businesses are being told to bear,” said David French, NRF’s vice president.
The committee held a hearing in order to see the impact those new chip cards have on small businesses.
The new chip cards are safely than the old ones, based on a magnetic stripe, as they produce a unique code for each and every transaction the client makes, which makes them more difficult to be falsified.
The necessity of this technology has been ignored over the last years.
However, while the chip hinders the copying of a card, the use of a PIN code is more useful when it comes about the card being lost or stolen.
Worldwide, the PIN code is the standard way of verification and retailers claim that this is more securing a method. Banks in the US, however, demand the use of a signature for the new card. Customers have the possibility of asking for a PIN card if they prefer this method.
MasterCard and Visa officials claimed that the fraud of a chip is a bigger threat that the one represented by a stolen or lost card.
“Upgrading to chip cards and chip-enabled terminals addresses counterfeit fraud, which currently has the biggest negative impact on the U.S. economy,” claimed Carolyn Balfany, MasterCard spokesman.
Whether the clients use a PIN code or a signature, they should remain vigilant and protect their payment information.
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