In 2015, major credit cards will begin to utilize chip-and-pin technology instead of black magnetic strips. Current credit cards in America use technology that is a minefield for hackers and easy to access. The new cards that will be introduced in 2015 feature a microchip that makes it extremely difficult for hackers to access. Every time a consumer uses a credit card, he or she will simply need to swipe and enter a PIN number.

New PIN Technology

With the new technology, staff members will not physically handle one’s credit card. When a staff member handles a credit card, he or she has the opportunity to write down a credit card number or make additional purchases with a card. The new technology allows customers to maintain control of the credit card.

Implementation of the Credit CARD Act

The Credit CARD Act will call for the new technology changes in 2015. Businesses will also be impacted by other aspects of the Act. For example, businesses will be restricted in the fees that they can charge for accepting credit cards. The new law requires that businesses charge “reasonable” fees for processing credit card transactions.

Other Effects on Businesses

Under the Credit CARD Act, businesses will need to invest in new equipment to be able to process credit cards. The new equipment may cost hundreds or thousands of dollars. Without the equipment, businesses will be unable to process credit cards in 2015.

Credit card companies and banks will need to offer new cards that also incorporate the PIN technology. The recent Target data attack in 2013 has raised awareness of the need for new credit cards that utilize PIN numbers. In 2013, millions of Target customers had sensitive data compromised in a major breach. The main cause of the data breach is purported to have been an attack resulting in the release of stolen information. Hackers were able to steal the information due to the magnetic strips on the credit cards.

Increased Credit Card Equipment Costs

More…The typical cost of a chip reader can be anywhere from $40 to $100. A mag card reader only costs about $20. New businesses may be stuck in a hard place in having to invest in new readers. Small businesses may also lack the funds to pay for this new equipment.

EMV is currently utilized by a majority of European countries. European countries depend on the EMV technology to prevent fraud and cyber attacks. The microprocessor also enables security professionals to monitor the development of threats. Fraud monitoring assists law enforcement in preventing major data leaks, such as the one that involved Target.

As credit cards make the transition to EMV microprocessors in 2015, businesses will need to adapt. Those businesses that fail to adapt may suffer from decreased revenue.