The move is part of a drive by the banks and payment companies to get people to use the new, more secure cards embedded with computer chips. Roughly half of all global credit card fraud occurs in the U.S. even though the country makes up only about a quarter of all credit card transactions, according to a report by Barclays earlier this month. The weakness with this technology is that cards can be easily copied by thieves, leaving people vulnerable to fraud. While October 1 was originally targeted as the deadline to get most Americans onto the new chip cards, most transactions are still being made using the magnetic strip method. Most large retailers have replaced their equipment, but thousands of small businesses have not and there are still hundreds of millions of credit and debit cards that need to be replaced. Visa and MasterCard set an October 1 deadline for merchants to switch their card machines from accepting magnetic stripe to accepting both chip and traditional magnetic stripe-only cards. Originally the banks relied on their own software and data from the payment networks to catch fraud at the point of sale in the U.S., but an increase in fraudulent transactions made it clear more was needed. The Payment Security Taskforce, a group that represents the banks, payment companies, and some large retailers, estimates that about 40 percent of all card readers will accept chip cards by the end of the year.
Comment on Here's why Americans are getting new credit and debit cards
By KEN SWEET, AP Business Writer, Seattle Post-Intelligencer: Business
Thu, 10/01/2015 - 2:16pm
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