In the news

U.S. PIRG
|
The New York Times
By
Rachel Abrams

Excerpt from "Chip Cards Will Require Users to Dip Rather Than Swipe," by Rachel Abrams, on page B8 of the New York Times, 29 September 2015.

"In the hustle and rush of New York, some diners at the Stage Door Deli in Manhattan may not even notice the extra three or four seconds it takes to buy their lunch. To pay for their Reuben sandwiches and tuna melts, customers with a small metallic square on the front of their charge cards — an increasingly common fraud-prevention chip — will have to dip instead of swipe. For several seconds, slightly longer than most people may be used to, cards are inserted and left in the cashier’s payment terminal, which uses the chip to determine whether the card is legitimate. [...]

Credit and debit cards without chips will continue to work until they expire, or until consumers activate their new cards. And they will still work at payment terminals that have been updated to accommodate chips. But new machines will prompt users who swipe a chip card to dip it instead.

“You should always use the chip device, not the swipe device,” said Ed Mierzwinski, the consumer program director of U.S. PIRG, the federation of state public interest groups.

The new chip is intended to make in-person purchases safer, and, in a matter of seconds, works as follows: During each transaction, the chip creates a one-time code. The payment terminal then sends the code to the bank over a network like Visa or MasterCard. The bank matches it to an identical one-time code and sends verification back to the terminal. [...]

Some consumer advocates say that credit cards are often a better choice over a debit card, regardless of whether they have a chip. “I would never use a debit card on the Internet,” Mr. Mierzwinski said."

Read more in the New York Time story "Chip Cards Will Require Users to Dip Rather Than Swipe," by Rachel Abrams.

One of my recent blogs has more on data breaches, existing account fraud, identity theft and Chip and Signature vs. the better Chip and PIN, which, by the way, isn't rocket science. Europe and Canada have had the better Chip and PIN for years. The Chip proves your card is not a clone and protects your account number from theft. The PIN proves you are not an imposter. But remember, Chip technology stops fraud in-person only, but not online. That's why I told Rachel Abrams: “I would never use a debit card on the Internet.” Why risk having your own money stolen and having to wait for the bank to give it back? Use a credit card.

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