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Consumers Confused By Chip-and-PIN Cards

Consumers lack knowledge and education about the chip-and-PIN cards they have been receiving from card issuers, new research shows.

According to a survey from CA Technologies, more than half of US adults have been issued a credit/debit card with a chip (59%).

Yet, only two in five (41%) said that they know what the benefits of having a chip card are, and even fewer (37%) say their card issuer provided information or education on how to use it.

Further demonstrating the lack of knowledge and education, more than three quarters of the credit/debit card owners who have received a chip card said they believe it will better protect them from fraud during an online purchase (77%).

"What's most disturbing from the survey is that people think their chip-card technology will help protect them in their online purchases," said Carol Alexander, marketing director for CA Technologies’ payment security business. "The fact is a more secure point-of-sale solution, which the chip cards are supposed to offer, will spark an increase in online, card-not-present fraud. We saw this phenomena in Europe and other regions who have adopted chip card technology. The strength of the US e-commerce market makes card-not-present fraud an equally important security issue that card issuers and merchants need to consider in the shift to chip cards for point-of-sale transactions."

With the holiday shopping season upon us, the poll also showed an even mix of how those issued a chip credit/debit card who intend to shop for gifts this holiday season planned to shop. Twenty-seven percent said they would shop mostly or completely online; 25% said they will shop mostly or completely in stores; and 47% said they'd spend an even mix shopping online and in store. And seven in 10 of those issued a chip credit/debit card said that the shift to chip credit and debit cards has had no/not much influence on how they will shop this holiday season (71%).

The new chip cards are part of the U.S. shift to the Europay, Mastercard and Visa (EMV) specifications for smart card payments and acceptance devices. The EMV specifications were developed to define a set of requirements to ensure interoperability between chip-based payment cards and terminals. EMV chip cards contain embedded microprocessors that provide strong transaction security features and other application capabilities not possible with traditional magnetic stripe cards.

Photo © Icatnews

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