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Soon, the credit card swipe will be a thing of the past.
If you're one of the millions of Americans who have one - or more - credit or debit cards in your wallet, you'll soon see some changes in your plastic. Let's talk about that:
What's up?
Credit and debit cards in the U.S. are moving to EMV technology (short for "Europay, MasterCard, and Visa"), or "chip card" standard. Chip-embedded credit cards are already in use in many places in the world, but are just being rolled out in the U.S.
What's different about these cards?
The new cards come with embedded chips that work as microprocessors. The info is stored in the small silver square that you will see on the front of your new cards.
Why the change?
Proponents of the switch said the cards are more difficult to copy and therefore safer. The change only helps protect cards users making in-store purchases though. The new chip cards don't provide any additional protections for online purchases.
Specifically...
The current magnetic strips on the back of credit cards store constant data. The new chip cards create unique codes for every transaction. While forgery is still possible, it would make it much more difficult - and costly - for anyone wanting to misuse the information.
"It's kind of like stealing an expired password," said Matt Schultz, analyst for CreditCards.com told Today.
When's this taking place?
Credit and debit card users are currently receiving their new cards in the mail. Visa, Discover, MasterCard, and American Express are all making the switch. About 120 million EMV chip cards have already been issued in the US, according to Smart Card Alliance. That number should jump to 600 million by the end of 2015.
Most noticeable change
Starting Oct. 1, customers will "dip" their cards into a reader as opposed to the current swipe method which reads the magnetic strip on the back of the cards. The new "dip" readers get their information from the microchip on the front. You will still have to sign for your purchases when using a credit card with EMV chips.
You won't see the "dipping" start right away, however. Experts predict a full transition to new card readers could take as long as two years. All the new cards will still have the old magnetic strip to accommodate those merchants who haven't made the switch.
Don't be scared of the dip
It's the same way you "dip" a card into an ATM machine, by the way. The transactions are expected to take longer than the current card readers, however.
And for businesses...
Also starting on Oct. 1, merchants without EMV reading capabilities will be responsible if your card information is used fraudulently. That responsibility currently falls on the issuer. The card issuer will still be responsible if the business has EMV capabilities. The rule was put in place to provide incentives for merchants to update their in-store terminals to accept the new cards.
If there's anything else you want to know...
Visit the Smart Card Alliance for everything you need to know about the new cards.