In the United States, chip credit cards seem to come out of nowhere, but the chip system has been around in several countries with a great deal of success. Recent data breaches have caused U.S. institutions to take a closer look at customer security. Implementation of the chip card is the result of that scrutiny.
It’s important for businesses to be chip compliant in order to support this move towards increased customer security. Revel point of sale systems, for instance, are chip friendly and offer additional benefits to the business.
How Do You Tell the Difference?
Chip cards feature a small silver square in the top left corner of the card. That microchip is the piece the credit card terminal will read during transactions. No-chip cards use a magnetic strip on the back of the card. Because not all businesses have transitioned to chip card readers, most chip cards have magnetic strips as well, so the card can be used in both instances.
Why Is a No-Chip Card Less Secure?
Credit cards without an imbedded chip hold all the customer’s sensitive information inside a magnetic strip. When a customer pays for something, this strip tells the card reader all this information in order to complete the transaction. All a thief needs to do is break inside and collect the data that was transferred in each of these transactions.
What Does a Chip Card Do Differently?
Rather than simply telling the card reader the information, the chip communicates with the customer’s banking institution and creates a transaction ID to complete the purchase. Because these IDs are unique to each transaction, they cannot be used again for future purchases. While a thief may still steal this information, they won’t be able to do much of anything with it. Chip cards create less incentive for hackers to steal data.
Transitioning to a chip payment system helps businesses protect their customers. Call 888-698-9246 to see how Merchant Account Solutions can assist with this process.