WBRE/WYOU – When buying something at the store you may be confused as to whether you are supposed to swipe or insert your credit or debit card these days. Why are those little chips. in 90 percent of American wallets, so important?
More than 8 million merchants across the United States accept electronic payments, which makes using your credit or debit card an easy way to pay. Due to the risk of losing cash or having it stolen and not being able to recover that loss, these cards are actually the safer method. Now, there is an even smarter way to safeguard your Money. $6 billion, that’s the cost of credit card fraud each year in our country according to the Electronic Transactions Association or ETA. Jennifer Stalica, of Scranton, says “we work hard for a living, we don’t want people taking our money.”
We’ve been swiping that magnetic strip to buy stuff for more than 40 years. “That magnetic strip card, much like a cassette tape in which the technology is based, can be erased and re-written on, just like music on a cassette tape can be erased and re-recorded.” says ETA CEO Jason Oxman. He says it’s time to steer away from the swipe to the chip. “The chip generates a unique or dynamic security code every time you use it. That’s why when you use your chip card you have to insert the card machine and leave it there because the card is actually generating a new security code every time you use the card,” he adds.
Customer security is paramount to the industry, so in late 2015 merchants were advised to get on the chip train or pay the price. Those who did not get a chip reader as 2016 began, would be responsible for any fraud happening at their business. The transition took it’s toll on small business owner Patty Leighton. She says “90 percent of my business is credit card use, so for that, I mean, you have to have it!” She owns the Bee Hive gift shop in Wilkes-Barre and says the price was a bit of a burden. “At that point I had to buy the machine, which was a huge expense for me, over $900. Which is a lot in one month and it certainly is a surprise,” she explains. Yet customers were reluctant to use the new machines. “Oh, 75 percent of customers have the chip for sure, but they don’t always want to use it. They don’t always want to put their pin in, they want to sign,” says Leighton.
“It’s been frustrating. We have experienced a little bit of fraud too,” exclaims Gerrity’s Supermarkets Co-Owner Joe Fasula. They bought the chip readers as soon as they came out, but is just now in the process of implementing them across his 9 stores, though not for lack of trying. “The company that handles all of the transactions didn’t certify their software to the satisfaction of all of the credit card companies until very recently,” says Fasula. The hefty price of replacing the old system hit hard as well. He says “it was a tremendous cost, when you add up the number of lanes we have times the number of stores we have, you can see that $500 per lane adds up quite quickly.”
Now, one of the main concerns from consumers is that the chip takes a little bit longer than just actually swiping your card, but according to the ETA, that’s not the case. Oxman counters that by saying “the entire transaction time from start to finish shouldn’t be that much different from the mag-stripe world it just feels a lot different because you are leaving the chip card in the machine in order take advantage of the security capabilities of that chip.” According to him more than 2 million merchants across the U.S. have made the switch; a move that in the long run will save money and keep you free from fraud.
So, is the security worth the wait? Stalica says “I’ve noticed that each machine is different in different stores. Some stores you have to sign and others you do not, so I think it’s just a learning curve. Once everyone gets used to it, it will be just fine.”
Merchants are not required by law to install chip readers, but again if they do not and fraud occurs at their business, they are the ones who are responsible for the cost of the loss. The U.S. is actually one of the last markets to migrate to chip technology because our financial system is more complicated than other parts of the world.