EMV Credit Cards Interview with WLS Radio Chicago
CreditCards.com Senior Industry Analyst Matt Schulz spoke on Thursday, October 1, 2015 with John Howell of WLS Radio Chicago about the September 2015 EMV Credit Cards survey. The interview and transcript are below.
John Howell: You probably received a new credit or debit card at some point in the last six to eight months and it has a computer chip embedded in there. And they’re the chip-and-pin cards or the chip-and-signature cards. And it’s a nationwide shift. Now if you’re a retailer, they’re gonna be expensive for you and beginning today you, not the credit card issuers, you’re on the hook for fraudulent charges, which makes a lot of retailers nervous. Including me. I have an interest in three retail stores and we’re having to switch over so I thought we should talk to an expert about this not only from a consumer point of view, but also from a business point of view. Matt Schulz is the Senior Industry Analyst at CreditCards.com and graciously has offered up a few minutes of his time on this Thursday morning. Hit Matt, how are you, sir?
Matt Schulz: I’m great, thanks for having me.
Howell: Well, today’s the day. What does this embedded chip do in these new credit cards?
Schulz: Well, it does two important things. One, it makes the actual plastic card harder to counterfeit. And two, when you use it in a chip terminal instead of passing all of your credit card information like expiration date and number, what it does is create a unique transaction code specifically to that one purchase that is then passed to the merchant. Then that’s stored on the merchant database and if a bad guy tries to steal it and use it to make another purchase, it won’t do anything. It’s basically like stealing an expired password.
Howell: How does this change how I pay at the register? Does it slow me down? I noticed at Angelo’s Liquors on 176, Route 176, in Lake Bluff that Angelo’s struggles with the new cards a little bit.
Schulz: Yeah, there’s going to be a little bit of a struggle because it is a big difference in the way we’ve been using cards. And instead of swiping and just putting it back in your wallet, what you do is what’s called “dipping” where you insert the card in the slot and then you complete the transaction by signing for it or entering your PIN then you pull the card back out and go on your way. So it might slow things down a little bit temporarily.
Howell: Is this fully implemented today, October 1st? Or that’s the target date, but it’s a slow roll-out, isn’t it?
Schulz: It’s definitely a slow roll-out. We’ve seen numbers anywhere from only 5% to maybe 20% of merchants have these terminals ready, but also we did a survey that showed only about 40% of American credit cardholders have these cards ready to use in those terminals, anyway. So it’s all kind of going slowly.
Howell: Ok, for retailers – what is it, a $200 to $1,000 per new payment terminal? That’s pretty expensive.
Schulz: Yeah, that’s pretty much it. And it is a lot of money, especially if you’re a giant retailer, but even for the mom and pop store on the corner it’s a big expense and it’s something that just with us coming out of the Great Recession and the economy still struggling a little bit, that most people don’t want to pay.
Howell: Well, I will see how it works out. I’m looking at it from a consumer point-of-view. I change my credit cards regularly because of fraud and fraud concerns, I just ask for new cards. And also the retail outlets that I have a marginal interest in, I know that that’s going to cost some dough to switch over to these new terminals and we’ll see how it works.
Schulz: Yeah, I think it’ll work out ok. And people can either just call their bank and ask for a new card or you can come to CreditCards.com and we’ve got a page with dozens of those cards that you can look at.
Howell: Terrific. Thanks Matt, appreciate it.
Schulz: Thank you.
Howell: Matt Schulz from CreditCards.com with some very useful information here.