Ever heard of EMV chips? If not, you will. These super-secure credit cards are already being used throughout Europe and they’re all about a much safer experience for credit card users. They are the latest technological advances meant to protect credit card holders, but the United States has been slow in putting them into use – until now.
Wells Fargo announced today that it would be incorporating this technology into many of its credit cards, especially those who travel internationally. This is good, especially considering the increasing difficulties with using anything but these EMV chips throughout Europe. For some time now, many American travelers have experienced difficulties when using traditional credit cards with the magnetic strips when traveling abroad. Today’s announcement by Wells Fargo will hopefully prove as an incentive for other credit card companies to move forward with their own plans.
Anytime new technology is introduced, there exists a transitional period. For this reason, Wells Fargo is also testing its Visa Smart Cards. These will have both the magnetic stripe as well as the new EMV chips in order to accommodate American-based networks until they too can come on board with the new advances. As it stands, most American retailers and other companies simply do not have the readers to accommodate the EMV. This is also the reason the bank is only offering the new credit cards to those customers who travel abroad.
That’s not all, though. It’s being recommended that prior to any new EMV programs, credit card issuers should take steps to educate their customers on how to use the cards as well as any new authorization or approval processes when these new cards are being used. Further, banks and credit card companies must work out the logistics regarding PIN numbers and signatures.
Traditionally, Americans can tend to be a bit resistant to change; not so with these new cards. The new safety features are incentive enough for American credit card holders. JPMorgan Chase announced that it too would be prepared as early as this summer to offer many of its card holders the new technology. In fact, both Wells Fargo and JPMorgan should have their new technology up and going by June.
Right now, those markets are limited only to around 15,000 Wells Fargo customers. JPMorgan hasn’t revealed how many of its customers it will be offering the new credit cards to; however, it too has suggested it will be limited, at least initially, to only those who travel overseas.
While everyone seems to be on board with the new technology, many banks aren’t prepared to make changes to their debit cards just yet. In fact, The New York Times reports that smaller credit unions are more likely to see these new advances before bigger bank chains will. This is interesting, especially considering the cost aspects. Generally, it’s the smaller banks and credit unions that tend to move a bit slower because of concerns over the expenses associated with any kind of across the board changes.
Regardless, it all comes down to effective encryption methods used to ensure credit and debit card users are able to move forward with that additional security.
There’s also the proverbial “elephant in the room” mindset too. Generally, credit card users who travel a lot are considered more affluent. The financial sector is well aware of this. One financial analyst said:
The business case for issuing EMV enabled cards to the affluent customer segment should be fairly easy to justify since it leverages the existing EMV enable POS infrastructure in Europe and Canada.
For now, both JPMorgan Chase and Wells Fargo are in the infancy of getting their new technology up and moving. Time will tell, however, it’s important to note this isn’t a matter of if this new technology will be put into place in the United States, but a matter of when.
Anytime the consumer benefits from these changes, it’s always a win-win scenario, despite any growing pains. Soon, those small magnetic stripes will be a thing of the past and we all will be shopping with fewer concerns over our credit card security.