Amarillo, TX - Millions of credit and debit cards in the U.S. will soon be replaced. Security is the main priority with this replacement, as credit and debit card fraud is said to still be thriving.
A big change is happening inside your wallet.
Magnetic strip credit and debit cards will soon be a thing of the past. Cards with computer chips (or EMV cards) will be the standard.
Banks are doing this in an effort to combat fraud. U.S. banks spend billions each year paying back consumers who have been affected by card fraud.
"Banks with the liability shifted back to the merchants and pulled it off our books," says Senior VP of IT at Happy State Bank David McCullough. "Right now, we incur about $500,000 a year in losses. We do have a lot of preventative controls in place that help mitigate that a little bit lower, but we incur 100-200 thousand dollars a year in lost revenue just based on merchant breeches."
However this is a two part process. While banks are issuing the new cards, merchants are required to replace the old credit card readers with the EMV chip readers.
The new cards provide a liability shift. Whichever party has not adopted the readers or cards, will be liable if fraud does occur.
"The fact that your personal information is not stored at a merchant you use, it just makes it so much more secure and you can rest a little easier knowing that that's going to be more secure information for you," says People's Federal Credit Union Marketing Director Kenja Purkey.
Although the cards are said to be beneficial, there is something to look out for.
Frauds are well aware of the conversion, and they are on the prowl capturing debit and credit card information from old cards while they can.
"They are increasing the breeches and also selling these cards a lot cheaper because it's almost like a yard sale, I guess you could call it. They're just trying to get rid of everything they have before it gets to that time," says Colby Gatlin, Assistant VP for the fraud department at Happy State Bank.
The transition will take some time, maybe even years for everyone to have a new card, however roughly half of all U.S. credit and debit cards will be replaced by the end of the year.
Some banks in Amarillo are already undergoing the process of dispersing new cards while others are still ordering.