Get ready for the switch to new debit and credit cards

Don’t throw away your old debit or credit card away just yet, but just know that its days are numbered. Starting October 1, 2015, cards embedded with small microchips, also known as EMV cards, will become the standard in Idaho as well as across America. This change will happen whether you have the new chip cards, or are still using a card with the traditional magnetic strip.

For years, big electronic card companies like MasterCard, Visa, and Europay usually claimed liability for any fraudulent transactions that occurred with their cards. Starting October 1st, financial institutions and merchants will become responsible for any fraud that occurs if a traditional magnet strip card is used. E-card companies, like Visa, will only be liable for fraud that occurs with the new chip cards.

Fraud and counterfeit are the big pushers to switch to the new micro-chip based credit and debit cards. The new chip cards are much safer than the old magnetic strip as they use a unique processing code every time they’re used for purchases. “What they essentially do is shake the customers private information when you insert your card,” said Jennifer Price, a Wells Fargo District Manager for Eastern Idaho. “It makes it more difficult for counterfeiters or fraudsters at the Walmart of the Target to capture your personal information.”

Financial institutions, card processing companies, and retailers have been prepping for months to make the change, Many small businesses who use merchant processing services are getting calls to send in their old card processors for new ones that are equipped to read the new style of e-cards.

“We had a phone call saying that on October 1st we’re going to have to have a new credit card machine with a chip in it,” said Jeanne Cooper, the owner of Park Avenue Antique Mall in Idaho Falls. “The credit card machine is very important to us and the one that we used to have was going to be obsolete.”

Not all small businesses will get calls and easy replacements like Cooper’s store. Depending on how a business structured it’s e-payment system, they may be responsible for the entire up-front cost and associated fee’s. Something Price said could cost hundreds and possibly thousands of dollars.

The switch is expected to take time. Hundreds of financial institutions across the country have yet to issue new cards to many of their customers. Many of the new e-chip equipped cards still have the capability of swiping with a magnet strip to accommodate for small businesses who don’t have an updated card reader.

“Many big retailers have card readers that accept both the magnetic strip and chip based cards.” said Tony Rasmussen, the VP of E-payments at Mountain America Credit Union. “What people will start to see is retailers insisting customers use the microchip payment method if they have a card that is capable, as it protects both the customer and the retailer from fraud.”

“I would just really encourage the small business owners, the partnerships, the sole proprietors to come into the bank to get their new debit card and get their new equipment set up so it doesn’t make it difficult for them to conduct business,” said Price.

Both Price and Rasmussen said people should talk to their local bank and credit union representatives if they have questions about the new chip cards or when those cards will be issued.