EMV Credit Cards Interview with KCBS Radio San Francisco

By Media Relations

CreditCards.com Senior Industry Analyst Matt Schulz spoke on Tuesday, August 4, 2015 with Susan Leigh Taylor and Stan Bunger of KCBS Radio San Francisco about EMV credit cards. The interview and transcript are below.


Susan Leigh Taylor: Target customers may have noticed a difference at the checkout line recently. The retailers have installed new credit terminals which can accept both the older mag striped credit cards as well as chip-based cards. For a closer look at how all of this is being received by customers, we’re joined on the KCBS ring central news line by Matt Schulz. He is the Senior Industry Analyst for CreditCards.com. Mr. Schulz, thanks for joining us this morning. You know, I have a handful of credit cards, but out of those five or six cards, I’ve only received one so far with the new chip in it. How are other customers around the country being affected?

Matt Schulz: Well, I think a lot of people are in the same boat as you and the troubling thing is that if people have received it they don’t know what to do with it and they don’t know what to make of it. And I think generally there’s just a lot of confusion around EMV and these smart chips in general.

Stan Bunger: You know, just anecdotally in the last week or so Target stores in the Bay Area, telling customers, “Hey – dip it, don’t swipe it” so they have terminals, but I went in my local Safeway the other day, they’ve got brand new terminals in there, but no one seemed to know and the system did not accept the chip card dip. It only accepted a mag stripe swipe.

Schulz: Yeah, I’ve run into that quite a bit. I see a lot of places where the terminals are there, but I’ll stick my card in the slot and nothing will happen. And then the person behind the counter kind of gives me a weird look and they clearly don’t exactly know how these things work. So there’s a lot of work still to be done.

Taylor: Do you think customers would be happier about these cards if they fully realized how much safer they are than the old mag stripes?

Schulz: Yeah, I do think they would be. And I think that that is partly the banks fault for not communicating quite well enough as to how these things work and why they’re better because they really are better and safer.

Bunger: Let’s talk a little about that. The mag stripe has all the information on. When I swipe it, the system grabs that information and that’s where these data breaches have occurred. What’s different about what’s include on the chip on that same card?

Schulz: Well the big difference with the chip is two things: 1) it makes the physical card harder to counterfeit, and that’s a big deal. But then the other thing is that when you activate the chip, instead of sending the credit card info to the merchant when you buy something the chip sends a unique code that a hacker can’t use if they find it. So if they get onto the database and take that information and try to use it, it won’t work. It would be like stealing an expired password.

Taylor: Will you have to remember another PIN number?

Schulz: Eventually you will, but for now most of these cards are still what are called chip-and-signature cards. So you sign for them the way you have with your card for forever.

Bunger: And let’s talk about what has to happen in the back-end. Is this why the roll-out is so scattered and slow? Is there a big deal for the merchants to do something on the back-end or does the terminal do that work?

Schulz: Mostly it’s a lot of money. Putting the terminals in, making sure the systems work, training up your folks. It really is a big difference in the way that people use these cards so there really is a lot that goes into it, but it’s mostly a money issue.

Taylor: Matt Schulz, thank you for your time this morning. Mr. Schulz is the Senior Industry Analyst for CreditCards.com.

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