EMV Credit Cards Interview with WBBM Radio Chicago

By Media Relations

CreditCards.com Editor-In-Chief Dan Ray spoke on Wednesday, September 30, 2015 with Kris Kridel and Sherman Kaplan of WBBM Radio Chicago about the September 2015 EMV Credit Cards survey. The interview and transcript are below.


Kris Kridel: Tomorrow is the official deadline for merchants to accept chip-enabled credit cards, although a lot of people still don’t have them or merchants, too. Let’s get an update from Dan Ray, Editor-in-Chief at CreditCards.com in Austin. Nice to have you on the program, thanks for joining us, Dan.

Dan Ray: Good afternoon, happy to be with you.

Kridel: I started getting warnings from my credit cards months ago that you gotta do this chip card and you’re going to be left out, you’re not going to be able to buy things, etc. It scared me into making sure that I had them, but do most people do that? Do they have these cards?

Ray: We just did a survey that said that more than six in 10 credit cardholders don’t have these chip-enabled cards, despite the industry’s deadline scheduled for tomorrow. So it’s kind of like a deadline without meaning like Y2k was. October 1 will come and go and people’s cards will still work, but under the hood, behind the scenes there’s a pretty big change coming.

Kridel: Yeah, I remember when we were all going to be on the metric system next week. So a big change is coming, but how long is it going to take if people aren’t ready to adapt?

Ray: It’s going to be a slow roll-out and it’ll depend on your bank and on the retailer. Both industries, the retail and the banking industries, are grudgingly going along with this change. Each of them is going to have to change and each of them is going to have to face some costs. Visa put out some numbers yesterday that said it’s going to take up to five years before 90% of our transactions will be done on these new chip cards.

Sherman Kaplan: So as people have been getting these in the mail they may not really be familiar with exactly what’s going on or what the technology does. There’s fraud prevention that’s in the works here. Give us a thumbnail of sketch of what that new chip’s going to do.

Ray: Ok, the chip will allow the transaction to be handled in a different way, one that replaces the old magnetic stripe. So the stripes eventually going to go away and the chip will do the transaction. And each time you will insert the card with the chip in it into a card reader, a little bit of radio transmission will take place between the two of them. They’ll shake hands, they’ll decide what kind of chip is being used, and then the card will transmit a unique identifier, called a token. And it’s only used in one transaction so unlike your credit card’s magnetic stripe, you’re using the number every single time, the chip will generate a unique token that will authorize one specific transaction.

Kaplan: And in overseas locations where this chip technology’s already been implemented, have they seen a reduction in fraud?

Ray: They have seen a significant reduction in one type of fraud, the face-to-face type. You can’t steal that credit card and have it continue to work. Once it’s reported stolen, that chip no longer functions. What it doesn’t do is eliminate other types of fraud, such as online payments. So that kind of fraud will continue and I think that’s where consumers need to be aware of, that one type of fraud is going away, the corps will quickly be transitioning over to going online since the card will still be able to be used there.

Kridel: Well that’s good to know. If a lot of Americans still do not have a chip card, are there a lot of merchants who still don’t have the technology that they need?

Ray: Yes, you’re going to see some foot dragging on both sides. The security is better, but it’s going to take awhile for the retailers to roll out their system. It will cost money for them to buy these new readers and it takes time and costs money for them to re-train their staff. Now on the banking side these chip cards are a little more expensive. They cost a couple of bucks each to make as oppose to a quarter or so to make the traditional magnetic stripe card. So it’s going to roll out eventually.

Kaplan: Alright, good information. Thanks so much. Dan Ray, the Editor-in-Chief at CreditCards.com based in Austin.

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