Trending on USA Today and other business news is an Associated Press report by Ken Sweet about the massive roll-out of Chip & PIN cards. Millions of Americans will have received new credit and debit cards to replace their old magnetic strip cards. The businesses where you currently swipe and sign need to upgrade their credit card terminals and point of sale systems to process Chip & PIN instead of ‘swipe-and-sign’ transactions.
If you’re still swiping a magnetic card and entering a pin number then you’re ripe for fraud. The magnetic strip contains information that never changes. It can be used over and over again. The new cards have a chip that creates a unique transaction code that cannot be used again. Instead of swiping, you “dip” or insert them into a card reader. Cards will continue to have a magnetic strip in case your favorite merchant is behind on upgrading their equipment.
CreditCard.com reports by the end of this year 575 million of us will be dipping not swiping with Chip cards. CNN Money says not so fast. “Banks are spending $8 billion or more to issue new cards, but they’re falling behind. Merchants don’t want to spend the $25 billion-plus it will cost to upgrade to new machines. And in the end, consumers won’t be much better off anyway.”
Enter mobile pay. As digital shopping drives a shift in how we buy things, the future of payments may well be check, cash and card free. Stay tuned.