Are chip and PIN credit cards coming?
By Claes Bell • Bankrate.com
The U.K. is all abuzz about "chip and PIN," but it's not a popular pub snack or a nickname for the newest celebrity power couple. It's the credit card security system rolled out in recent years to stem a wave of credit card crime.
Chip and PIN replaces the credit card system we're used to -- swiping a magnetic strip and signing a receipt -- with a new generation of card readers that scan a tiny chip activated by a personal identification number, or PIN.
Yet in the United States, no one is rushing to adopt chip and PIN. The cost of new card readers, liability for fraud loss, and criminals already working around the system all figure into the reluctance to bring it to American cardholders.
Crime stopper?
The chip and PIN system is designed to make it more difficult for criminals to cash in on credit card fraud. The magnetic strip system used in the United States only requires a signature to authenticate a purchase. This allows criminals who get their hands on victims' credit cards to start making purchases immediately, potentially charging up thousands of dollars before the card is canceled. More enterprising thieves can also use information gained by Internet hacking or skimming -- secretly swiping a victim's card on a card reader -- to "clone" copies of victims' cards. (more)
The U.K. is all abuzz about "chip and PIN," but it's not a popular pub snack or a nickname for the newest celebrity power couple. It's the credit card security system rolled out in recent years to stem a wave of credit card crime.
Chip and PIN replaces the credit card system we're used to -- swiping a magnetic strip and signing a receipt -- with a new generation of card readers that scan a tiny chip activated by a personal identification number, or PIN.
Yet in the United States, no one is rushing to adopt chip and PIN. The cost of new card readers, liability for fraud loss, and criminals already working around the system all figure into the reluctance to bring it to American cardholders.
Crime stopper?
The chip and PIN system is designed to make it more difficult for criminals to cash in on credit card fraud. The magnetic strip system used in the United States only requires a signature to authenticate a purchase. This allows criminals who get their hands on victims' credit cards to start making purchases immediately, potentially charging up thousands of dollars before the card is canceled. More enterprising thieves can also use information gained by Internet hacking or skimming -- secretly swiping a victim's card on a card reader -- to "clone" copies of victims' cards. (more)
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