Swiping credit cards may soon be something of the past as the retail industry moves toward advance security protections that are already commonplace in Europe. The old swiping action — which allows the magnetic strip on credit cards to be decoded by electronic card readers — will eventually be replaced by a computer chip embedded in every new credit card.
With the new chip technology, instead of swiping credit cards, consumers will insert credit cards into the bottom of the merchant’s card reader where the card remains until the transaction is completed. During the transaction, a credit card reader processes information and creates a unique code for every purchase. The unique code is important, because it makes it extremely difficult, if not impossible, for identity thieves to take information off the magnetic strip and produce counterfeit credit cards.
In Europe, credit cards are embedded with a computer chip, and the cardholder is required to enter a Personal Identification Number (PIN) for each transaction. This system is referred to as “Chip and PIN.” Eventually, all consumers will be required to establish and use a PIN, which will provide a better defense against unauthorized credit card transactions and identity theft.
In the near future, merchants will have an incentive to upgrade their credit card processing technology. Historically, banks and credit card companies have been responsible for the costs of unauthorized transactions. Beginning in October, merchants will be responsible if they have not upgraded their systems to process credit cards using the computer chip technology. Therefore, you will begin to see “Chip and PIN” machine readers at nearly every major retailer very soon.
Contact your bank or credit card company for information about how new cards will be issued or to find out if you can receive a new card embedded with a computer chip before your current credit card expires. During the transition, many terminals will come equipped with a magnetic reader and a chip reader to accommodate cards that have not switched over to chip technology.
If you suspect you are a victim of identity theft, contact the Ohio Attorney General’s Identity Theft Unit by calling 800-282-0515 or visiting
www.OhioAttorneyGeneral.gov.