Ever since October of 2015, American credit card users have increasingly been using the more secure smart chip readers instead of swiping their cards, but usually at the expense of transaction speed and simplicity. On October 1st of 2015, the United States credit card industry began what is termed the "liability shift," which transfers responsibility for fraudulent credit card transactions to the merchant or the card issuer, whichever is not using smart chip technology.
How Credit Card Smart Chips Work
Traditionally, credit cards had magnetic stripes that were not encrypted in any way. This decades-old technology was extremely quick and easy for cardholders to use, but it was also vulnerable to being compromised by criminals using handheld card readers and other low-tech methods. In the aftermath of many high-profile security breaches of major retailers, the credit card and retail industries accelerated its efforts to strengthen credit card security. The credit card's magnetic strips are being replaced by embedded microchips, often called EMV smart chips after Europay, Mastercard and Visa, the companies behind this standard.
These smart chips are not merely read by a credit card terminal, they communicate two ways to decrypt the cardholder's information and authenticate the transactions. Unfortunately, many of the implementations of this technology have resulted in a much slower and less predictable experience by cardholders. For example, EMV terminals may not work if a cardholder inserts his or her card too early or removes it before the transaction is complete. In addition, the processing time of each transaction could take up to 15 seconds, which compares poorly to the fraction of a second required to swipe a card with a magnetic stripe.
New Technology Speeds Up Smart Chip Transactions
Earlier this year, Visa announced Quick Chip, a technology enhancement that improves EMV chip card processing. It not only speeds up checkout times, but it also significantly streamlines chip compatible terminal implementations by retailers. The new system has already been deployed at New Leaf Community Markets, a chain of seven natural grocery stores in Northern California. New Leaf customers can now insert and remove their chip card from store payment terminals in just about two seconds. In addition, shoppers at New Leaf can insert and remove their chip enabled credit cards while their purchases are being scanned, whereas other chip compatible terminals may require customers to wait until the end of the transaction to have their payment card processed.
Following the successful Quick Chip launch at New Leaf, its implementation partner plans to quickly begin activating at other retail merchant partners with just a remote software upgrade. "The upgrade to Quick Chip was fairly invisible from our perspective," said Brendan Lazarus, IT manager, New Leaf Community Markets. "Once we decided to move forward, working with our partner Index, the process moved quickly. We appreciate the responsiveness of Index in cracking the code on this technology quickly so we can make our customers' checkout experience better and faster."
Retail users want greater security from their transactions, but both retailers and cardholders are not satisfied with the increased difficulty and longer transaction times of EMV card readers. By upgrading credit card terminals to quickly and easily process EMV chip cards, Visa is taking us one step forward to the time when we can enjoy both increased security and speed every time we shop with our credit cards.