Tags: credit | card | chip | rule | deadline

Credit Card Chip Rule Now in Effect... So, What's in Your Wallet?

Image: Credit Card Chip Rule Now in Effect... So, What's in Your Wallet?
Embedded computer chips are seen on newly-issued credit cards. (Mike Blake/Reuters)

By    |   Thursday, 01 Oct 2015 08:19 AM

The deadline for having new credit card chip technology in use by customers and merchants arrived Thursday, but not many are ready for the changeover because of its cost.

Visa told "Today" that just five percent of merchants – 314,000 of roughly six million – have the terminals that are created to protect them from fraud. Likewise, Creditcards.com said 60 percent of cardholders don't have the chip-enabled cards to make their transactions safer.

In an effort to reduce counterfeit and credit card fraud, more than 200 million payment cards with embedded computer chips were supposed to be issued in the U.S. ahead of the Oct. 1 deadline, according to the Smart Card Alliance.

Credit card companies set the deadline for requiring consumers to carry the new kind of card and for retailers across the nation to upgrade payment terminals, reported Reuters, and then practically everyone missed it.

"Research shows that a low percentage of merchants are ready to accept these cards," said Matt Schulz, Creditcards.com senior industry analyst. "Once that's established, it becomes less of a burning deadline for the issuers. Then the merchants say, 'Why are we going to put these in when the cards aren't out?'"

The Chicago Tribune said many smaller banks found that making the change was so expensive that the risk of fraud liability didn't make the shift to the safer card a high priority.

Wintrust, a bank in suburban Chicago, said it intends to switch its customers to new cards when it begins replacing credit cards in October and then issuing new-chip cards to replace older cards as they expire.

"The cost of the fraud doesn't make sense for us not to do it that way," said Tom Ormseth, a senior vice president at Wintrust. "You have to weigh how much in fraud you've had in the past with how much it's going to cost to implement this. ... It's very expensive to replace all those cards all at once."

Ormseth said Wintrust estimated the implementation will cost it about $1.5 million, which was a big hit for a bank its size.

"The last thing I want to do is roll this out to my customers and then not have an ATM work and not have their cards work correctly," said Ormseth, adding that he hopes to have all cards converted by 2017.

Mary Wilkerson, senior vice president of marketing at Central Bank of Boone County in Missouri, told USA Today that her bank is also feeling the crunch of implementing the new technology. She said that producing cards with both the strips and chips at the transition phase has significantly increases the cost.


© 2017 Newsmax. All rights reserved.

 
1Like our page
2Share
TheWire
The deadline for having new credit card chip technology in use by customers and merchants arrived Thursday, but not many are ready for the changeover because of its cost.
credit, card, chip, rule, deadline
440
2015-19-01
Thursday, 01 Oct 2015 08:19 AM
Newsmax Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
America's News Page
© Newsmax Media, Inc.
All Rights Reserved