The Basis of Processing Credit Card
Sunday, 9. October 2011
Credit cards using chip and PIN technology continue to grow in the United States to do, according to two recently published studies. It is time for retailers – and their suppliers of commercial services – to prepare for the transition from magnetic stripe and smart card processing credit PIN.
Chip and PIN is based on a microprocessor to store account information on the card and a PIN (Personal Identification Number) to “unlock” the point of sale. Also known as EMV (Europay-MasterCard-Visa), it is considered safer than the MAG line technology was the basis of processing credit card for over 40 years. There are some great technological inventions, like the band credit card can have endured so long without innovations.
The United Nations Federal Credit Union (UNFCU) reported a year after a chip and PIN card in the U.S. a 20% jump balances revolving October 2010 to February 2011 compared to the same period last year introduced last. In addition, total purchases on the card jumped 15%, and card applications rose by 153%.
JPMorgan Chase and Wells Fargo have followed the main UNFCU independently releasing their own smart card and PIN earlier this year. As the fund, the two banks targeted customers who are frequent travelers abroad and often have problems using their credit cards can scratch.
More than 2.5 million EMV cards are supposed to be released to cardholders in the United States in 2011, according to Aite Group, a leading research and independent consultancy focused on business, technology and regulations and their impact on the financial sector. The recent study shows an increased optimism about smart card and PIN from the security professionals in North and South America.
Nineteen percent of respondents agree that technology processing credit cards will migrate to the United States in the next year or two, in a previous study in 2009, no one agreed. A much higher percentage (73%) indicated that the impact of high electromagnetic fields in reducing fraud, two years ago, only 48% thought so. Yet 55% of respondents predicted that the replacement of the tape lasts seven years or more.
“The leaders of the EMV card industry believe that the U.S. is no longer a question of whether but of when,” Aite senior analyst Julie Conroy said McNelley digital transactions, a publication that reports on trends in the industry payment processing. “The relevance of the tape is gone.”
Consumers and merchants, you are notified.
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