JPMorgan Chase, the largest bank credit card issuer, is starting to let customers know that their new Chase Freedom and Slate cards will have the long-awaited ‘chip and signature’ added security feature.
U.S. credit card companies have committed to replacing the current and outdated magnetic-stripe system in favor of the so-called EMV (Europay, MasterCard and Visa) chip technology widely used throughout Europe.
The chip-based cards could not come soon enough for U.S. consumers. Millions of retail shoppers have had personal data hacked over the last year, fueling an urgency among card issuers, retailers and banks to move to more secure platforms and servers.
There are two types of chip-based systems available: “chip and PIN” and “chip and signature.”
Some EMV standard cards offer the “chip and signature” system, during which you will be asked to sign for the transaction as opposed to entering your PIN.
Chase Sending Out Letters
Chase has started sending letters to Chase Freedom and Slate customers, explaining that their new cards “will have an embedded Chip and Signature feature for added security and wider acceptance outside the United States.”
How are chip-based cards safer? A magnetic stripe card can be cloned by thieves and used in additional transactions. EMV cards, however, contain a microprocessor chip that uses encryption to prevent its contents from being replicated.
“Chip and PIN” cards are generally considered safer than “chip and signature” cards. That’s because most cashiers or point-of-sale personnel do not verify a person’s signature on the card. Nonetheless, moving to chip cards from magnetic-stripe cards is a huge step in the right direction, security experts say.
The new cards will be delivered by January 2015, Chase said. The deadline set by the credit card industry to complete the move to chip technology is October 2015.
Massive payment card data breaches against big retailers, such as Target and Home Depot, and most recently against JPMorgan Chase itself, has fueled the faster adoption of chip- based cards.
JPMorgan Chase reported earlier this month that cyberthieves attacked its servers, which caused a breach of personal data from 76 million households and 7 million small businesses. Chase also said that no financial accounts were affected.