If the retail data breaches of 2013 and 2014 left you wondering if there’s a safer way to pay, you’re in luck. As the United States implements EMV (also known as chip) technology, using your credit card at your favorite stores should be more secure.
In fact, a few retailers have announced that they will start issuing chip-enabled credit cards. Which merchants have embraced EMV technology, and where should you look for a chip-enabled card? Take a look at the details below for more information.
Retailers move slowly to chip technology
Although chip technology has been available for years – and is widely used in other parts of the world – the U.S. is dragging its feet about shifting to it. The main reason for this is cost; retailers will have to pay big bucks to upgrade their payment terminals to be EMV-compatible.
How much are we talking? According a report in Bloomberg Businessweek, it costs merchants $500-$1,000 per terminal to make the switch. That’s not chump change, especially for small businesses.
But there are also costs associated with producing chip-enabled cards. The same Bloomberg article noted that EMV cards can cost up to $2 each to make, but magnetic-strip cards only cost a few cents apiece. This means that both retailers and credit card issuers have good reasons for delaying the move to full EMV implementation.
However, change is under way. Visa and MasterCard have set an October 2015 deadline for retailers and issuers to make the move to chip-enabled cards and terminals. After that time, if credit card fraud happens, the party with the lesser technology will be held liable. This is a big incentive to shift to EMV as soon as possible.
Sam’s Club MasterCard leads the pack
While many retailers aren’t enthusiastic about the switch to EMV, a few have started to make the move well in advance of the October 2015 deadline. Sam’s Club is leading the pack: On June 23, 2014, it became the first mass retailer to offer a chip-enabled credit card. Walmart, the parent company of Sam’s Club, announced that its co-branded cards will start coming chip-enabled later in 2014.
What’s more, all of the payment terminals at Walmart and Sam’s Club stores in the United States are capable of accepting chip cards. This puts these retailers significantly ahead of others when it comes to EMV readiness.
But Target isn’t far behind. In April 2014, the retailer announced that it will switch all of its co-branded credit and debit cards to chip-and-PIN capability by early 2015. At the same time, it’s also upgrading all of its payment terminals to EMV compatibility. The New York Times reports that Target’s cost to switch over all of its payment cards and terminals is $100 million. However, this is probably a worthwhile investment for the company, which experienced one of the biggest data breaches in history in December 2013.
Want a chip in your credit card? You have options!
Although very few retail credit cards are currently chip-enabled, there are a lot of other cards on the market that come with this technology. If you want a chip in your credit card, you have options.
For example, as of summer 2014, Citibank offers EMV chips in all of its consumer and college credit cards. Most other issuers offer chips in at least some of their products, so check out the Nerds’ full list of America’s best EMV credit cards. Just remember that until merchants start using EMV-enabled terminals, you won’t get the benefit of enhanced security.
The takeaway: U.S. retailers have been slow to make the move to EMV technology, but a few are leading the pack. If you want or need a chip-enabled card, you have lots of options outside of retail cards. Check back with the Nerds often for more updates about this important topic!
Chip-enabled credit card image via Shutterstock
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