Two weeks ago I got my new credit card (since old one expired). The new card had a ’shiny’ chip installed on it. All new credit cards now come embedded with these micro chips. These new chip credit cards are called ‘SmartCards’. These cards have become quite common in Asia and Europe and are now set to take over Australia and the rest of the world. Here are some of the benefits and features of SmartCards:

How Do We Use These Cards

Currently we swipe the magnetic stripe at the point of sale terminal…..Soon most retailers will have terminals where you don’t swipe but insert the magnetic chip…The card will remain in place while the transaction takes place. You will enter a PIN number rather than signing.

Currently not all cards are chip enabled and not all terminals can accept chip enabled cards…Hence all smartcards will continue to have a magnetic stripe (so you can use it at all retailers).

As part of the transition to chip, over the next few years more and more in-store payment terminals will be updated with chip technology. So hopefully in a couple of years, no more swiping - just insert and key in PIN.

Enhanced Security

One big drawback of magnetic strips on cards is that it is very susceptible to fraud. Card skimming at Auto Tellers and using small devices to collect information from hundreds of magstripe cards at a time are apparently some of the prominent ways of fraud. The micro chips in the SmartCards has security and software which makes replicating it almost next to impossible - and thus reducing fraud.

Another way in which it reduces fraud is by eliminating the requirement of signatures. Quite often people can try and replicate the signature on the back of the card……PIN removes the possibility of this replication.

Other Added Benefits

With the removal of signature requirement, the entire payment process becomes faster. It has been reported that it will speed up the payment at the check out by at least 8 seconds…

I also read in one of the articles that this chip technology will allow multiple accounts to be added on to one card - so your savings a/c and credit card plus other accounts all in one card. I don’t still understand the exact benefit here because this was something we could do even previously - I called the bank to get some idea but unfortunately they were not of much assistance. This technology is still very new and the customer service staff have not been briefed yet. But I am sure in the near future we will find out more about this benefit.

I haven’t still used my new chip embedded card at a terminal which caters for the chip cards - none of my local retailers have these terminal yet…But ‘yet’ is the keyword here. I guess - very soon they will be everywhere - Everywhere because both MasterCard and Visa are pushing for this new technology.

Related Posts:

• Store Credit Cards - Pitfalls And Advantages
  What Are Store Credit Cards? A lot of retail giants offer 'Store Credit Cards'. Store Credit Cards are different to co-branded credit cards. Co-branded...
• Woolworths Offers Credit Cards
  Woolworths will be launching its own credit card on September 1st. Its partners are HSBC and Master Card. Woolworths Everyday Money credit card will...
• Debit Cards In Australia
  The popularity and the usage of debit cards is on the rise. Internationally the money spent using debit cards is more than that spent...

Topics: Financial Topics |

Comments

Name (required)

Mail (will not be published) (required)

Website

« Comprehensive Motor Vehicle Insurance | Home | Watch Out For Scams »