You may have noticed at Target or most other stores, instead of swiping your card, you are asked to stick it into the machine. This is due to the new microchips on credit and debit cards that are steadily replacing the magnetic strip on the back.
The purpose of the chip is to ensure better security. With the old cards, the strip held one code that fraudsters could steal and copy. The new chips produce a new code with every use, thus reducing the risk of fraud. Dave Witts, president of US payment systems for Creditcall, claims duplicating a chip card couldn't work "because the stolen transaction number created in that instance wouldn't be usable again and the card would just get denied."
But does this guarantee complete security? Confidential information can still be stolen, but it will be significantly harder to do so. Chip cards have already been tested and proven widely around the world, notably in Europe. So what took America so long? Most retailers haven't had machines capable of reading chip cards, and didn't want to pay for them. But now, retailers who don't accept chip cards will be liable for any fraud occurring as a direct result.
What do you think of these new cards? Do you, like many other consumers, feel uneasy about leaving your card in the machine for so long? Do you think businesses should have been forced to make large investments to pay for these new machines? Tell us your thoughts below.
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As a big proponent of the technology in general, I believe this new microchip system would bring a positive change in security. However, I don't believe that it is necessary. I also don't believe that every business should pay for the new machines and the government should force them to be responsible of credit card fraud. Don't credit card companies take responsibility of it? And there are small businesses that don't even take credit cards. I think people don't use cash enough. Even though cash is not as convenient as credit cards or microchip cards, it is necessary to use 'real' money. I know some young people who use credit cards and pay pal irresponsibly. And this includes me lol. Recently, I opened a new bank account and got my own credit card. Everything seems to be better at first. I didn't have to take my purse everywhere I go and I didn't have to keep any penny after buying something. But recently I realized that I spent approximately three times more money a month than usual. It is hard to keep track of the money getting out of your pocket when you just swipe every time. Microchip card system such as pay pal and apple pay would not help the situation in this perspective.
ReplyDeleteYes, I completely agree. In some ways, people seem to be figuring out on their own how to get away from credit cards. For example, here in Northern Virginia, Craig's List is really thriving, and Craig's List payments are cash or check.
DeleteAbigail, craigslist mostly uses cash. Some people on craigslist have Paypal accounts though. Checks aren't so easy because you don't have any insurance that they are good.
DeleteZoe, I think even small businesses have to make choices about what kinds of payments to take. I think a free market society has been enormously helpful to small businesses. For example, on Etsy, customers can pay through Paypal or with a credit card or even with an in person cash option. I do think that the government shouldn't be the lead decision maker in finances for businesses.