Chase’s Chip Tech Expands To Protect More Payments

“The world keeps getting smarter. Shouldn’t our transactions be smarter, too?”

That’s the motto Chase has used to promote EMV chip technology, which Chase is expanding to its debit cards, credit cards and ATMs to help its consumers become better protected as part of the push toward EMV chip-enabled technology that major issuers and banks have focused on getting into the hands of consumers.

To continue its mission, Chase said it will convert more than 70 percent of all its credit and debit cards by the end of 2015 — allowing more than 80 percent of its cardholder spending to be done using chip-enabled cards. Chase currently has more than 22 million chip cards in the market, the company said.

“Fraud and security threats facing consumer payments today is a complex issue that can’t be solved with any single technology,” Gordon Smith, CEO of Chase Consumer and Community Banking, said in a company news release. “We’re working to employ a variety of approaches to protect our customers – adopting chip technology is a critical step on this journey.”

Despite the push from issuers and banks to educate the general public and merchants on EMV technology, a recent Chase survey shows that a majority of Americans aren’t aware of chip technology. The survey indicated that 80 percent of customers have concerns about the security of their card transactions, and 65 percent of those surveyed hadn’t actually heard of the technology.

Also worth pointing out from its survey included results on what consumers believe the point of EMV to be. A majority (76 percent) said they think the technology will help small businesses prevent fraud. Recent forecasts from Visa indicate that half of businesses will have EMV-equipped POS terminals by the end of 2015.

Chase said that customers that do not have a Chase chip debit or Liquid card will receive one within the next year. While Chase now embeds most of its new cards with chips, Chase — like other banks — is working to determine a system to efficiently replace its massive amount of credit and debit cards in circulation. Although Chase’s new chip credit, debit or Liquid cards will have an embedded chip, the cards will also have the magnetic strips so the cards can still be used at merchants who haven’t made the EMV shift.

Chase also indicated that it will work to help chip technology continue to gain wider acceptance among its consumer and business customers, which means offering those customers access to terminals that would enable businesses to actually accept chip cards, mobile wallets, contactless payments and the traditional swipe payments at the POS.

Chase is among the participants in the Payments Security Task Force that has joined together to promote educational events and materials to help spread awareness about the importance of payment cards that are EMV chip enabled. The most recent projection from the task force estimates that the U.S. shift to chip cards will be close to complete by 2017. The Payments Security Task Force is comprised of participants from Bank of America, Capital One, Chase, Citi, Credit Union National Association, Discover, First Data, Global Payments Inc., Independent Community Bankers of America, MasterCard, National Association of Federal Credit Unions, Navy Federal Credit Union, Shell, Subway, U.S. Bank, VeriFone, Visa and Wells Fargo.

The task force, which formed in early 2014, was designed to spark discussion among executives in the payments space on enhancing payments system security. The discussions have centered on the chip technology that industry leaders say will decrease card fraud because of the one-time code that is generated with each transaction.

Also to help smooth that transition, Visa recently announced the launch of an online toolkit aimed at helping small business owners make the switchover. The online kit offers a 10-step guide for merchants to understand how to implement the technology, tools and resources to know how to do so, and a training guide on how to train employees to better understand accepting chip cards at the POS.

“Chip technology will bring an important new layer of security for credit and debit cards by helping to make stolen account information useless to criminals,” said Stephanie Ericksen, Vice President of Risk Products for Visa, in a recent news release. “It is a priority to increase merchant awareness and understanding, given a liability shift in October 2015, after which merchants who are not ready to accept chip cards may be responsible for counterfeit fraud.”