EMV Credit Cards Interview with WIOD Radio Miami
CreditCards.com Senior Industry Analyst Matt Schulz spoke on Thursday, October 1, 2015 with Jason Lopez of WIOD Radio Miami about the September 2015 EMV Credit Cards survey. The interview and transcript are below.
Jason Lopez: Chipped credit cards are supposed to be accepted by businesses beginning today. Today was the deadline, the day they had to be able to accept them. Chip and signature, chip and pin, I guess they call them, too? And what does it mean to you and why is it important? And why should you be pleased with this new technology? Or this technology that is now required to be involved with your retail operations? Let’s talk about it with Matt Schulz, Senior Industry Analyst at CreditCards.com. And the newest smart chip credit cards are becoming more common. And they’re supposed to be accepted today. Good morning to you first, Matt. Thanks so much for joining us. Are businesses complying?
Matt Schulz: Most businesses aren’t. The numbers range anywhere from about 10% to about 20% of merchants that are ready to accept these cards, but also fewer than half of American cardholders have one of the chip cards. So everybody’s kind of moving slow on that.
Lopez: Right. What is a chip card, first, and why is it good technology?
Schulz: A chip card’s a big step forward in credit card security for two reasons. One, it makes the actual plastic card harder to counterfeit, but then it also, when you use it in a chip-enabled terminal it creates this unique transaction code that’s specific to that one purchase that is then sent to the merchant and the merchant holds that in their database. If bad guys steal it off of their database and try to use it to make another purchase, it won’t work. It’s kind of like stealing an expired password.
Lopez: Right, I get it, I get it. It makes sense to me. Now what happens if a business does not accept it after today and there’s fraudulent charges on a card? Is there a penalty?
Schulz: Well, the merchant might end up being on the hook for those fraud losses, and that’s a big change from the past when banks have mostly eaten those losses.
Lopez: Right. So now it’s the retailer how might be on the hook for them, too. Ok, got it. Does this change in any way that the customer pays at the register? Whatsoever?
Schulz: It’s a big change in the way they pay. Instead of swiping and putting the card in your wallet like you have for years, you’re instead going to be doing what’s called dipping and that’s basically inserting the card in the slot, completing the transaction probably by signing for it, and then taking the card out of the slot when it’s done and going on your way.
Lopez: Ok, it’s kind of like what you do at an ATM, only you’re not going to pull out as quickly as you do at a gas station or ATM, right?
Schulz: Yeah, it’s closer to what we’ve done with an ATM than a traditional swipe with a credit card.
Lopez: And tell me if I’m wrong, Matt, that it also protects us in another way, which is an unscrupulous person at the cash register who might take that and be able to write down a number or something.
Schulz: Yeah, exactly. It’s a big step towards improving credit card security. It’s certainly not perfect because it doesn’t really help with online fraud, but it’s a big step forward.
Lopez: Yeah, it also doesn’t really help you at a restaurant either, does it?
Schulz: Well, it can, it depends. It doesn’t necessarily stop somebody from using one of those handheld skimmers because the chip cards will still have the magnetic stripe on it to ease the transition. But it’s still worth doing.
Lopez: Got it. Matt, it sounds interesting and fascinating, Matt. Thanks for shedding light on this for us. We do appreciate it.
Schulz: Thank you.
Lopez: Alright, Matt Schulz, everybody. Senior Industry Analyst at CreditCards.com.