RateCity
Chips on Cards: security or stress out?
Until recently, most credit card issuers were not providing "chip cards", ie. cards with microchip security built in. That has now changed, with a gradual roll out by big banks offering chip cards across the range. The idea behind chip cards is that the data previously held only on the magnetic strip is also held inside an embedded micro chip. Once mag-stripe cards are phased out, this will in theory prevent easy theft of the card details using portable "skimmers" which are used by criminals to quickly swipe, and steal the details of a mag-stripe card. |
 |
No more Mickey Mouse signatures
The second reason chip cards are more secure is that when using them, a PIN is entered instead of an easily-forged signature. If your card is stolen, it will be useless unless the PIN is known.
Using your chip card at retail
Many retailers across Australia already have the ability to use these chip cards on their existing readers at point of sale. The cards being introduced to the market place now usually contain both chip and magnetic strip so you can choose whether to use a PIN number or a signature. The theory is that entering a PIN number is quicker than signing for a purchase. If this turns out to be the case, retailer queue times could be significantly reduced as they become more efficient.
According to a recent article published in the Sydney Morning Herald, chip card PINs will be supported by VISA, Mastercard and AMEX systems beginning June 4, 2008. However, only those with a chip card will be able to use the new system, and only at retailers who have installed the updated terminals at the point of sale. The entire roll-out will take three to four years, according to the article.
Chips go online
When used online, chip cards offer no additional security over old mag-stripe cards. Your best bet for online purchases is to use the online password security systems offered by VISA and Mastercard. "Verified by VISA" requests a password specified by you when purchasing goods online at a store which supports the system. Mastercard SecureCode operates in much the same way, adding an additional level of security to online transactions.
Chips on offer
The major banks and also several smaller institutions currently offer a broad range of chip cards, with additional cards being added all the time. Although chip cards are a good first step towards better credit card security, it will be a while yet before the magnetic strip is history. Even so, there is no reason not to use a chip card, since they work with existing card swipe machines. So next time you’re shopping for a credit card, ask if it features chip security.
Useful Links
Previous Story
Is your bank ripping you off with bank fees?
Next Story
Five great freebies for the family
Lowest Rate Cards
Rate
Free Days
