Why Am I Still Swiping With My New Chip Credit Card?

The push was hard.

Security had to be improved for the millions of credit cards sitting in our wallets and purses after a highly-publicized massive data breach at Target in late November to early December 2013.

Hackers gained access to millions of peoples credit card data and personal information through Target's point of sale (POS) systems. The thieves were able to gain access to nearly 100 million Target customer's personal and financial data.

Experts said our old swipe magnetic striped cards were too risky, and poor for security. Europeans and others around the world had turned to Chip and Pin card technology.

A deadline was set. By October 1, 2015, merchants - not banks - in the United States would be responsible for fraudulent transactions if the new credit card technology, with accompanying new payment terminals, wasn't installed in businesses.

Slowly, new Chip and Pin cards have been distributed. Many continue to have the old-fashioned swipe capability.

Good thing.

How many times have you proudly pulled out your shiny new chip-enabled credit card, ready to insert it into a merchant's new payment terminal, only to be told "Sorry, we don't do the chip yet," by the nearby clerk.

How come?

Well, it appears two reasons are keeping us swiping mad.

Merchants say they are caught up in a tough situation; they can only enable the new card-readers purchased after loading newly developed or integrated new EMV software from a third party into its systems, which can be a challenge for local IT engineers working at smaller companies.

According to a Florida lawsuit filed by several merchants:

“...while software code for card-accepting devices was historically simple enough to be written on the back of a business card ... with EMV, that same software wraps around the walls of a room three times …hundreds of thousands of lines of code ... suddenly there is a ‘fire drill’ to replace all of this simple software, compounded by the facts that the EMV code is hard to write, harder to certify and that few EMV software developers understand the U.S. market.”

As a second, perhaps more frustrating step, merchants must then be "certified" as ready to go, often by the bank card issuer.

As Marketplace states, the "certification queue is currently very long, as you can imagine that there are a number of merchants seeking to roll out EMV at the same time.”

Some merchants have turned the tables, and are blaming the banking industry for the delays.

A lawsuit filed last week in a California federal court claims that the banking industry collaborated to hand the bill for fraud (after the October deadline) to store owners, further complicating the situation.

-image via ShutterStock