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Three facts you need to know about tomorrow’s chip-card conversion

WASHINGTON, DC (September 30, 2015) — Today, Mallory Duncan, an expert on consumer privacy issues and Senior Vice President and General Counsel for the National Retail Federation provided commentary on the eve of the EMV conversion deadline.

“Tomorrow, nothing will change for shoppers except that some will begin using their cards differently. Consumers with chip cards will begin ‘dipping’ their cards, instead of swiping them to pay at chip equipped stores,” Duncan said. “If you are part of the majority of shoppers who still haven’t received a new chip card from your bank, you can still use your old magnetic stripe card at any retailer just as you do now.

“Banks have failed to meet their own deadline for converting to chip cards, but America’s retailers are open for business either way.”

FACT: Many retailers are ready to start accepting chip cards, but banks are behind their own timeline for improving credit card security.

  • According to a CreditCard.com survey in early September, only 40% of cardholders have gotten a new chip card.
  • Furthermore, credit card companies have been unable to grant the necessary software and payment terminals certifications to stores nearly fast enough to meet their own deadlines. Consequently many retailers have chip-reading terminals set up in their stores, but they can’t turn them on until they’ve been certified by the credit card companies. Until then, customers will have to continue swiping their cards.

FACT: Retailers are taking further action to protect consumers’ financial data.

  • Many are going beyond the chip card mandate and voluntarily implementing data encryption and tokenization to safeguard the payment authorization process.
  • Nearly all major retailers are working to implement data encryption/tokenization, which many experts believe will do more to protect shoppers’ financial data than U.S. – style EMV cards.

FACT:  Experts, retailers and consumers agree – adding a PIN is the best way to prevent credit card fraud.

  • The transition to chip and signature cards is still only a half measure—cards without PINs are not the safest possible measure. It’s like locking the front door and leaving the back door unlocked.
  • Most banks refuse to include PINS on credit cards, but the majority of U.S. consumers prefer to use chip-and-PIN cards rather than chip-and-signature cards.
  • NRF and the retail industry have called for chip-and-PIN cards – which are widely used in Europe – but the card industry is issuing cards in the U.S. that only require a fraud-prone signature as proof of identify.

 


About NRF Foundation

The NRF Foundation is the 501(c)(3) nonprofit arm of the National Retail Federation, shaping retail’s future by building awareness of the industry through statistics and stories; developing talent through education, experiences and scholarships; and fostering career growth among people who work in retail.­­

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