The next time you swipe your credit card at check-out, consider this: it’s a ritual the rest of the world deems outdated and unsafe.
The United States is the only developed country still hanging on to credit and debit cards with those black magnetic stripes, the kind you swipe through retail terminals.
Last month, Visa announced policies that will give U.S. banks a reason to issue smart cards and stores several reasons to accept them, starting in 2015.
Next year, Visa will start dangling this carrot in front of store owners: if they replace most of their terminals with ones that accept smart cards, they will no longer need to have their payment-system security checked every year. U.S. stores spend millions of dollars a year for these audits.
In an even more momentous shift, in 2015 Visa is shifting the liability for a certain kind of fraud from the banks to stores. The specific case is this: If a customer presents a smart card in a store that can’t accept it, then it will fall back to using the backup magnetic stripe on the card. If that transaction turns out to be fraudulent, the payment processor will be liable, and in practice, make the store eat the loss.
Story by Peter Svensson for the Associated Press
- Magnetic Stripe Credit Cards Will Go Away
- More Issuers Adding Chip Technology to Credit Cards
- Gas Prices Driven Up 7 Cents Per Gallon by Swipe Fees
- With Debit Card Changes You May Need To Carry Cash
- Avoiding Credit Card Problems Abroad
- Debit Card Scam Hits Michaels Stores In Massachusetts And 19 Other States