Many credit card users have experienced the pain of having your personal information compromised. To resolve this problem, the credit card industry has introduced new cards equipped with microchips that are considered more secure than the traditional magnetic strip.
What is the difference?
The chip attached to the new credit cards is to prevent data thieves and counterfeiting. With the old magnetic strip cards, when you swipe your card, data is sent from the credit card machine to a computer in the store, which then is transferred to the card company. If a hacker gets that information at any point during that process, it is enough to steal your card information and freely use it for online purchases until the card is shut down.
The microchip credit card is different. It generates new information for every transaction made. Even if a hacker steals your card information during a specific transaction, it is impossible to use that piece of information to get access to your card.
Technically, the concept of the new card is fraud proof, and it certainly solves the data thief problem. However, for online users, the microchip cards offer no more security than the traditional magnetic strip cards.
According to insiders, the new cards simply make it more expensive for hackers to fabricate these credit cards; they will find a way to break the system, even though it will cost more and take more time than the traditional cards. Nevertheless, switching to the new chip cards is still a long step ahead in the process of tackling the data thieves’ problem.
According to Senior Vice President of product at MasterCard (NYSE: MA) – Carolyn Balfany, the industry’s goal is to have the new technology in place at the end of October 2015. Since October 2015 is also the date that new liability rules go into effect, which will place greater liability for merchants without the microchip cards infrastructure, banks, card companies and other parties are moving at full speed with the microchip implementation plans. ?