For the typical business person who runs across fraudulent transactions involving credit cards, credit card processing with smart chip technology adds an extra security measure to purchases. When customers pay for purchases with credit cards featuring embedded chips, merchant accounts are protected because all purchases receive special validation codes. Once the card produces a validation code, fraud is less likely to occur because the code is unique and one-of-a-kind. With smart card technology, another transaction cannot have the same validation code.
Customers Must Enter Pin Numbers or Sign for Transactions
While it is true that some merchants require signatures whenever customers use credit cards, most business owners currently do not ask for signatures unless the purchase amounts exceed certain limits. But, with the new technology centered around embedded chips, all credit card processing via card readers require either pins or signatures. Customers who feel uncomfortable using pins when making credit card purchases may have options to sign.
Card Readers May Enable Customers to Bypass Pins
Some card readers accommodating cards with embedded chips have options to bypass pin requirements, while some banks issue chip-and-signature cards that do not require pins. Many credit card users never use pins. There is no reason to use a pin with a credit card unless the consumer wants a cash advance featuring a high withdrawal fee and mandated interest payments. In Europe, some card readers require pins, so Americans traveling abroad may want to make sure they know their credit card pin numbers for credit card processing purposes. Another option is to use debit cards instead of credit cards.
Why Smart Chips are Better than Magnetic Stripes
Consumers may wonder why their old-fashioned debit and credit cards with magnetic stripes need upgrades. Traditional cards with magnetic stripes are more vulnerable to exploitation. While the newer card readers that accept credit and debit cards with embedded chips do not guarantee freedom from identity theft or fraud, the extra protection makes a difference.
Cards Featuring Smart Chips Have Good Track Records
Credit and debit cards featuring smart chips are gradually replacing cards with magnetic stripes because smart chips offer merchant accounts and customers better security measures. According to statistics generated by countries already using smart chip technology, track records show that fraud is less prevalent when consumers use cards with smart chip technology. For this reason, cards featuring smart chips help protect identities and stop fraudulent transactions.