On Tuesday of this week (25th, February, 2014) Chase CEO, Eileen Serra announced that they would be offering Chip & Pin cards sometime in 2014 at Chase’s investor conference. This has become a hot issue recently with a spate of consumer credit card data being breached (Target being the largest example with 11 million cards potentially being accessed).
Chase already offers EMV cards, but instead of requiring a pin these currently only require a signature. This means if somebodys physical card is stolen, the thief only needs to do a vague copy of your signature to get access. By adding the requirement of a PIN instead of a signature, thieves now need to guess a four digit number (1:10,000 chance) to use your card.
How Does An EMV Chip Work?
An EMV chip contains a tiny microprocessor that encrypts credit card transaction data and communicates with EMV-enabled devices to confirm whether the card is authentic of not. Because of this, EMV enabled cards are almost impossible to duplicate and thus provide better security for the card holder (it also results in less fraudulent transactions for the merchants and credit card processor).
Why I Love This Change
The biggest advantage of this new change for me isn’t the added security, it’s that there will now be a US-issued card with no foreign transaction fees that can be widely accepted in Europe & Australia. A lot of card processors in these locations require not only an EMV chip, but also require you to input a PIN and this cannot be left blank to prompt for a signature. For those not traveling to these locations frequently, this is a minor but great security upgrade – for those who do travel there this is a game changer.
This change will be rolled out to the following cards:
- Chase Sapphire Preferred ($95 annual fee, waived first year, no foreign exchange fee)
- Marriott Rewards® Premier Visa® Signature Card ($89 annual fee, waived first year, no foreign exchange fee)
- British Airways Visa Signature® Card ($95 annual fee, no foreign transaction fee)
- The Ritz-Carlton Rewards® Credit Card ($395 annual fee, can be waived for the first year with a smaller sign up bonus, no foreign transaction fee)
- The Hyatt Credit Card ($75 annual fee waived first year, no foreign transaction fee)
- J.P. Morgan Palladium Card
- J.P. Morgan Select Visa Signature Card
Unfortunately all of these cards have an annual fee, hopefully Chase or another card issuer will add a card with no annual fee, no foreign exchange fee and a decent rewards program. If they do, they can expect myself and a lot of other European/Australian travelers to take them up on the offer.
Hat tip to Bank Rate. We’ve been unable to find an official press release for this news, but will update when it’s available.
One of my concerns is that the credit card pushes the liability onto the consumer if they do not protect their PIN number assume a PIN is infallible otherwise but research papers have demonstrated that is not the case.
Plus it’s kind of annoying to remember PIN numbers for all your cards.
PIN cards still have zero fraud liability disclosures, so they are really no different to signature cards. Surely a PIN is a better safe guard than a signature, most cashiers don’t accurately check signatures and the variances in signature to signature is so great that it’s hard to check correctly.
If you struggle to remember the PIN number for your cards, I’d suggest having a base pin of two numbers and then use a different two numbers per card based on the card information. E.g base PIN of 26, then the third and fourth number is the first letter of the bank (Chase = C = 03).
It has changed. The liability issue was quite serious in Canada since it was adopted quite early there. It’s good to know things have changed.
Interesting idea. It sounds easier than remembering the caesar cipher method. Of course PIN can take quite a while to validate when I was using it.
Most card companies will void the zero fraud liability if the PIN is easily guess (e.g 1234 or your birthday) but you’d be foolish to use that anyway.
Thanks for the comments, Colin.