If you're outside the financial industry, inside the United States or outside the debate on data breaches, there's a decent chance you've never heard of chip technology for credit cards.
In the next five years, you’ll most definitely be hearing about it.
Banks and credit card companies are taking security seriously, and finally they are catching up to European technology. American companies are now installing chips in some of their credit cards that allow for enhanced security.
“Chip” refers to a microchip placed in the credit card that makes it extremely difficult to copy. Hackers had been catching up with magnetic strips currently used on credit cards and figuring out other ways to copy information. In most cases, the chipped credit cards will require a signature or PIN number to approve a purchase.
Chip technology has been proven to cut down on credit card fraud in Europe, where some countries have required chip technology for years.
The U.S., however, is catching up. Target, which fell victim to a colossal data breach in late 2013, said this week its credit cards, complete with chip technology, will be ready by 2015.
Wells Fargo and Co. this week announced the creation of two credit cards, one of which is a chip card. The company describes Propel World as being for the frequent international traveler who has to deal with chip technology frequently, according to Wells Fargo regional spokesman James Baum. It also emphasizes rewards for hotel stays and flights, customary for international travelers. It will have chip technology installed.
But the second card, called Propel 365, does not have the chip technology. It gives higher reward standards for the domestic gas purchases and restaurant charges more common for the American cardholder.
With the world going the way of chip technology, it seems the Propel 365, which Wells Fargo is rolling out with a heavy publicity push, would have chip technology so that when America catches up with the rest of the world, banks and credit card companies would be ready.
Not to worry, Baum said. Current Wells Fargo Visa consumer card customers can request a card with chip technology, and the bank is monitoring how to deal with the future of credit cards.
“(R)ight now, very few domestic merchant terminals support EMV technology,” he said in an email. “As merchant chip card acceptance become more popular here in the U.S., we’ll evaluate the best way to support our customers’ needs.”
It’s only a matter of time before chip technology reaches the United States full on. It’s comforting to know banks and credit card issuers in the United States finally look like they’re about to embrace it.