Most retailers aren’t ready to accept new chip credit cards

22News explains the tech behind the chip, and how it affects you and your finances

NORTHAMPTON, Mass. (WWLP) – New credit card security chips are part of a massive upgrade against credit card fraud.

Thursday, October 1st was the day all businesses needed to have installed new chip readers where you insert your card, instead of swipe it. However, they told 22News, installation isn’t easy.

“They have to get an actual internet connection and actual networking gear in order to make the card readers function normally,” said Tony Russell-Smith, a computer technician at YES Computers in Northampton.

YES Computers has the equipment, but their system isn’t online yet. That means they, along with the thousands of other retailers who haven’t installed the new readers, could be held liable for any fraudulent activity traceable to their business.

22News also dug deeper to explain the technology behind the chip, and what it really means for shoppers. For starters, each chip generates a unique code that can’t be replicated. It makes stealing your credit card information almost useless.

Currently, the chip is known as “Chip and Sign” technology, meaning you’d be required to insert your card into the new readers, and then sign to approve the transaction. However the chip was initially designed, and is being used in Europe as a “Chip and Pin” card, where users insert their card and punch in a PIN to approve the transaction. The PIN adds an extra layer of security.

If you do not have a new chip card, don’t worry; 60% of Americans have not been issued an updated card yet. Credit card companies and banks have until the end of the year to send those cards out. So, you can still use your existing card with its magnetic strip in the meantime.

When it comes to the checkout stand, purchases might take a bit longer than you’re used to. The traditional “swipe” of the card only takes a second, but these new card readers take any where from 10-20 seconds to scan and read your chip.

Now if you do have any fraudulent activity on your account, you would still file a claim the same way, through your credit card company or bank. If the fraud happened at a retail location that did not have the new card readers installed, they could be held responsible for any fees associated with the fraud.

Currently, ATM’s and gas stations are the only locations that do not have to upgrade. They are exempt from installing new chip readers and there’s no word yet as to when, or if they will be required to in the future. So for now, you will still swipe your debit or credit card there just like you do now.

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