Chip credit cards: When will the more secure cards be available for American consumers?

Visa and MasterCard have set the deadline of October 2015 as the date when banks and merchants must start using credit cards with chips or incur significant added liability for fraudulent transactions.

With consumers concerned about gigantic data breaches at nationwide retailers and the deadline approaching, what progress is being made by credit card companies and retailers in issuing the new cards?

CardHub, a credit card comparison website, Wednesday released its “2015 EMV Migration Report,” which analyzes the smart-chip credit card plans and progress of the country’s 10 largest credit card issuers as well as 55 major retailers.

EMV, which stands for EuroPay, MasterCard, and Visa, is a global set of standards for chip cards and the technology used to verify them. EMV chip cards contain embedded microprocessors that provide strong security features not possible with traditional magnetic stripe cards.

EMVCo manages, maintains, and enhances the specifications. It’s owned by American Express, Discover, JCB, MasterCard, UnionPay, and Visa, and includes other organizations from the payments industry.

Eighty countries globally are in various stages of EMV chip migration, including Canada and countries in Europe, Latin America, and Asia. The United States is one of the last countries to migrate to EMV chip technology.

Some of CardHub report’s main findings include:

• All 10 of the largest credit card issuers are in the process of issuing chip-based credit and debit cards and expect the majority of their portfolios to be updated by the end of 2015.
• All chip-based cards issued by major banks will continue to have magnetic stripes – enhancing usability while also mitigating certain fraud protection benefits.
   
• All of the major retailers that responded to the CardHub survey are on track to meet the October 2015 EMV transition deadlines set by VISA and MasterCard.
   
• Retailer transparency on EMV is low given the level of consumer concern about data breaches and financial security. Only 17 of the 55 retailers contacted provided information about their policies – including just 25 percent of those that have been victims of breaches.
   
• In a chip card isn’t automatically re-issued, consumers can call and request one from customer service.

Copyright 2015, Rita R. Robison, Consumer Specialist

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