In Canada, shoppers are quite used to punching in PIN codes when using both their debit and credit cards to pay for their purchases. Since debit card use in Canada has been popular for so many years, the concept of the PIN is nothing new. However, over the past few years, it has become commonplace for PINs to also be used for credit card payments. Gone are the days when customers had to sign their signatures to a slip in order to complete a credit card transaction.
At least, this is the case in Canada. American credit card holders are still signing those slips! And while this may come as surprising news to most Canadians, their American counterparts are yet to take advantage of chip card technology. But that\’s about to change. As Susan Johnston of U.S. News & World Report reveals, the United States is looking forward to adopting chip card technology as soon as this October.
It’s also known as EMV card technology. As Johnston explains, EMV stands for “Europay, MasterCard and Visa, the three card brands that created the chip in Europe and Canada.” She goes on to note that the predominant reason that U.S. merchants will be taking on this new technology is because they will become liable for credit card fraud instead of the credit card issuers. Merchants, therefore, are bound to upgrade their payment terminals.
“Instead of swiping a magnetic stripe, consumers insert their EMV card into a payment terminal until the transaction is completed,” Johnston explains, “This reduces the risk of fraud for in-person transactions.” Now, many Canadians already know about this process. And they feel that having a PIN code is a much safer way to securely put through a legitimate transaction than signing a name – something that anyone can do.
However, Chris Camejo, who is the director of assessment services for NTT Com Security, explains the real benefit of punching in PINs versus relying on magnetic swipes. “Magnetic stripes contain data that is simply read by a swipe terminal as the card passes through, similar to reading a very short piece of a VCR or tape cassette,” he is quoted as saying, “The data on a magnetic stripe can also be overwritten, just like a tape cassette.”
He notes that because of the easy ability to overwrite the data found on magnetic stripes, they can be bought online for a few hundred dollars, making the cloning of cards pretty easy. Chip cards, on the other hand, contain “cryptographic keys”, Camejo explains. “Rather than just reading data off of the card, the terminal sends transaction data to the chip, which processes it with the cryptographic keys and then returns the data to the terminal.”
This is not to say that the use of a PIN over a signature does not provide a significant amount of fraud protection to customers. Camejo asserts that fraudsters are given a much harder time trying to commit their crimes when they don’t know a customer’s PIN. Johnston points out that many U.S. merchants are already in the process of making the switch from their older terminals to newer ones that accept chip or EMV cards.
In Canada, we’re quite lucky to already have that luxury. If you’re a business owner who is yet to adopt this new technology, Canadian POS Corporation would be happy to help you! We can upgrade you from your current POS terminal to a fantastic new Countertop or Wireless terminal within days! Both accept chip cards, of course. For more information, call Canadian POS Corporation at 1-877-748-2884 or email us at info@localhost.