Safeguarding Your Financial Information and Identity
Chip and PIN Cards are Coming
But they’re not here yet. Currently in Europe, the banking industry has already converted to the use of chip-and-PIN technology for their credit cards as a way to stave off the increasing threat of credit card fraud. Instead of magnetic strip, a micro-chip containing information on the issuer and the credit card holder is encrypted so that it can only be read by a merchant’s reader. The problem for Europeans traveling in the U.S. is that the technology has yet to be adopted here. So, for most of them, their cards don’t work with the magnetic scanning machines. Big problem if they want to rent a car.
The technology is overdue here in the U.S., but the banking industry is concerned with the costs and burdens it will place on merchants to convert their equipments. Plus they may be waiting for it to gain more worldwide acceptance. The good news is that a few of the major banks are testing the technology by issuing chip-and-PIN cards to customers who travel to Europe. It is hope that this will give them the experience to develop more efficient means of distributing these new, ultra-secure credit cards to the rest of us within the next few years.