A Guide to POS in 2020: Chip Card vs Magnetic Stripe Card
If you have a brick and mortar business and are trying to keep up with the times in terms of point of sale transactions, it’s a good idea to know the ins and outs of the comparison between chip cards vs magnetic stripe cards. Your swipe machine may need an upgrade if you plan on keeping up with the security, efficiency, and versatility offered by modern transaction systems.
Use this guide to learn the differences between purchases made with a chip card vs magnetic stripe card. If your swipe machine is older and doesn’t accept the latest forms of electronic payment, your business may be suffering in terms of professionalism and efficiency. Help your business by staying aware of the advantages and disadvantages of each type of transaction.
EMV Liability: What you Need to Know
EMV chips are the new technology implanted into modern credit cards that take advantage of new point of sale systems’ chip readers. Unlike many countries in the world, the United States did not make the upgrade of point of sale systems in businesses mandatory. Your swipe machine may not have chip reading capabilities even now. However, there’s an important reason to upgrade right away, which is EMV liability.
This refers to a change in the law regarding credit card fraud. Since fraud is much more difficult to commit with a chip card vs magnetic stripe card, the party that fails to upgrade the point of sale system to include a chip reader is now liable for the credit card fraud. Before, this responsibility was solely the cardholder and their issuing bank.
Since you can now be liable for repayments on credit card fraud, you may want to consider upgrading your swipe machine with EMV chip readers for this reason alone.
Differences between EMV Chips and Magnetic Stripes
Swipe machines that include EMV chip readers authenticate transactions at the point of sale. This is why the machine takes a minute to “read” the card before you can remove it. Impatient customers or the owners of high-volume stores may not prefer the slightly longer transaction times compared to a conventional magnetic stripe transaction.
However, there are added security measures that should be enough to convince anyone to upgrade their swipe machines.
Security difference
Card skimmers have been used for years to commit credit card fraud by copying your magnetic stripe transaction. If they can gain access to your pin as well (such as by using a camera or looking over your shoulder), a thief can steal your whole account with a simple swipe.
EMV chips are considered to be impossible to skim because of their technology and authentication process. The question of chip card vs magnetic stripe card comes down to this security difference.
The Takeaway
The swipe machine in your business may be subject to fraud if you haven’t upgraded to an EMV chip system yet. Worst of all, new legislation will make you responsible for any fraud that does happen.
Use this guide to learn the differences between chip cards vs magnetic stripe cards so you can upgrade as soon as possible.
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