When it comes to credit card use in America and other countries around the world, one of the things that can make people very nervous is the risk of fraud. While credit cards are able to provide ease, convenience and flexibility to consumers there are also high levels of credit card fraud committed each year. A number of steps have been taken to try and reduce the level of fraud committed when it comes to credit cards, one of which includes the implementation of chip cards.
While chip cards have been used in some other countries for some time, credit card networks in the United States began to introduce them last year in a bid to try and enhance security and reduce credit card fraud. However, a recent report has showed that many retailers in the United States are struggling when it comes to the use of these chipped cards, which is creating problems for both the retailers themselves and for those trying to use the cards.
Problems reading the new technology
Experts have said that the problems have arisen because payment terminals that are used by many retailers simply cannot read the new technology. Despite the fact that credit card providers are keen to get merchants to sign up to this technology, by the end of last year only 20 percent of retailer terminals have been activated to enable them to process the chipped cards. This is despite the fact that 60 percent of credit cards that are issued by banks now have chips in them.
Many retailers have been unable to update their terminals and equipment because of the costs that are involved and due to longer transaction times. This has further impacted on the ability of retailers to accept payments from those with chipped credit cards. According to recent data, retailers will collectively pay up to $35 billion to join the new system that will enable them to take these payments.
Time is also an issue for many retailers when it comes to making the switch, with all participants not only having to switch their systems but also go through testing periods and certification. Officials said that the whole process is a complex and time consuming one, which is causing headaches for retailers. However, retailers have also been warned that they could face liability for fraudulent transactions carried out at their stores if the system is not in place.