Chip-enabled credit cards and bank cards are the tech wave of the present.

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A new technological feature is coming to a credit card near you. If you haven’t heard, credit cards and bankcards are getting a makeover, adorned with new small metallic silver or gold computer chips on the front of the card. Called EMV microchips, the new hardware is about as big as the business-side of your phone’s SIM card and holds all your payment data that is now contained on your card’s magnetic stripe.

Although the new cards that banks and credit card companies are already mailing out to customers look a lot like your old familiar cards, they are based on a completely new technological payment system. Instead of being swiping your card to make a purchase using existing cards and store payment processors, the new chip-enabled cards will have to be inserted squarely – or “dipped” as some are calling it – into a new card reader. The new chips have some real benefits, including improved security to dissuade fraudulent use of cards. That’s because the chips generate a unique code specific to each and every purchase, unlike the easily-duplicable magnet stripe, which makes it easy for thieves to get a card’s vital information through date breaches and hacking. They use that information – often captured through skimmers on ATM machines or gas pumps – to produce fake cards, selling them or using them to rip you off. But the new chips will have a new data code specific to every time you “dip.”

“The microprocessor adds additional security data to the transaction each time the card is used,” says Randy Vanderhoof, executive director of the Smart Card Alliance.

Security experts back up the premise that the new chip-enabled technology makes it harder, if not impossible, for cyber crooks to make and use fake credit cards.

“We have not seen a proven data breach of a chip card in an EMV market since it’s been in place,” said Owen Wild, a security director at NCR.

However, the benefit of added security will only take place where a customer uses their card at a point of purchase, not for online transactions, where a huge percentage of cards are used. Additionally, if a thief physically obtains your card, the chip won’t provide any added protection when they use the card.

While these chip-enabled cards may seem like they’re cutting edge technology, they’ve actually been around for more than 20 years, and already commonly used in other parts of the world like in Canada and all across Europe.

Expect to see a huge swell of retailers who start accepting the new cards in October. That’s because they have a huge incentive to upgrade by October 1, rooted in the responsibility for card misuse. Currently, if a card is used fraudulently, the bank that issued the card has to pay the bill for the fraud. But starting October 1, regulations change, mandating that whichever party had less protection and safeguards – the bank or the retailer – has to reimburse for the cost of fraud. That’s a huge financial liability to absorb for retailers that don’t start using chips by October 1.

Many big retailers like Target, Wal-Mart, and Sam’s Club, have been accepting chip-embedded cards since last November. But the change-over to chip-enabled payment technology can be pretty costly, about five times that of setting up magnetic-stripe payment systems. That additional cost prohibits many smaller and mom-and-pop retailers from

Banks and credit card companies are issuing the new cards like wildfire, too – sometimes just mailing them to consumers without notice. MasterCard is on board and Bank of America has already been adding chips to credit cards since 2012 and to their debit cards for a year now. Chase says it plans to switch 70% of its credit cards and debit cards to the chip-enabled cards by the end of 2015, and completely upgrading their ATM machines at the same time. As of the end of July 2015, about 18% of all Visa cards – about 127 million — were chip-enabled.

Industry analysts predict that about 63% of all credit cards and debit cards will utilize the chip-embedded technology by the end of 2015, and that number should rise to 98% by the finish of 2017.

For that reason, the magnetic stripe will still be present on most new chip-enabled cards, so they can be used by all retailers. The chips also take longer to process, with the typical chip-enabled transaction taking about 5-10 seconds as opposed to 3-5 seconds for traditional transactions. Instead a quick swipe of the magnetic stripe and removal of the card, cards with chips needs to be inserted and left in place until a beep or light signals it’s been registered. You also can’t insert your card before the retailer has totaled up your purchases like with magnetic-striped cards, and a signature will still be required.

Despite these changes in the consumer’s experience and a transition period in the industry, analysts are optimistic that the new technology will help curb some data theft and fraud.

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