To protect consumers against fraud and cyber-theft, JPMorgan Chase is planning to update more than 70 percent of its credit and debit cards with new microchip technology by the end of 2015, the bank announced on Tuesday, May 12.
Chase is the latest US bank to convert its debit cards from those with the traditional magnetic stripe to chip cards, which look like regular bank cards, to a new metal chip embedded in them. The chip creates a unique code for each transaction, and adds additional encryption technology to the card, making customers’ personal information harder to steal.
Customers who do not already have a Chase chip debit or Liquid card will receive one in the mail during the next 12 months, the bank said. Chase already embeds chips into most of its new credit card products, and is also upgrading its ATMs to accept chip cards.
The microchip technology cards are already widely accepted in other parts of the world, particularly in Europe, but is expected to become the default option in the US in the near future. The transition from stripe to chip cards has come partly as a result of a series of high-profile sensitive data hackings, including the December cyber-hack of media giant Sony Pictures, and has increased the focus on security among large companies, especially banks.
Last year, JPMorgan Chase saw a massive data breach in which 76 million customers were affected, compromising sensitive information such as email addresses, phone numbers, and home addresses.
“Fraud and security threats facing consumer payments today is a complex issue that can’t be solved with any single technology,” said Gordon Smith, CEO of Chase Consumer and Community Banking. “We’re working to employ a variety of approaches to protect our customers—adopting chip technology is a critical step on this journey.”
Bank of America began converting its debit cards to chip-based cards in October 2014. Citibank will start converting its debit cards this summer, and Discover has already started introducing the new product.
Despite the major banks pushing the new chip-card technology, this type of card usage in the US remains minimal. The cards require that retail merchants upgrade their cash registers or check out equipment in order to accept them, which often comes at a significant expense. Just under half of merchants are expected to have the technology to accept the new cards by the end of the year, according to the Payments Security Task Force.
Customers with chip-based cards, when given the option, will continue to swipe their cards as they have done for decades, bypassing the more-secure but unfamiliar chip technology altogether.
In a Chase survey, 65 percent of consumers have not heard of the chip-based cards. (With reports from Huffington Post, San Antonio Business Journal, Associated Press)
(www.asianjournal.com)
(LA Weekend May 16-19, 2015 Sec. D pg.1)
