You may have recently received a new credit card or debit card with a computer chip embedded in it. It's part of a nationwide shift by major card issuers to offer added security against fraud—and shift the liability from card issuers to merchants, if they do not upgrade to this technology by Oct. 1, 2015.
But will this new technology really help protect consumers and reduce the costs of fraud? In the U.S. alone, credit and debit card fraud costs were $16 billion last year, according to Javelin Research.
So card issuers are taking action to make it more difficult to counterfeit cards. By the Oct. 1 deadline, credit card companies and retailers will shift to "smart cards" using a new technology called EMV—which stands for Europay, MasterCard and Visa, the three companies that created the standard for processing payments. But not all companies will be able to comply by this date. And many consumers may have yet to activate their new EMV chip cards.
About 120 million Americans have already received the card though, and that number is expected to grow to 600 million by the end of the year, according to card comparison website CreditCards.com.