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New, safer debit cards to help prevent fraud

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By Correne Martin

 

Debit card users will soon learn a new way to use them that allows for less fraud and liability on their part. Banks will issue all users new cards with a special chip inside that makes data nearly impossible to be stolen from the machine and used to create fake cards. 

 

EMV, or Europay Mastercard Visa, debit cards, as well as credit cards issued by local banks, will roll out late this summer or early fall as the United States gears up to join the ranks of Europe, which has used these for years and, last year, completely converted to this safer type of card. In France, where EMV cards originated, the country has cut down on fraud by 80 percent in the past year, according to Taylor Audet, a personal banker at Associated Bank in Prairie du Chien.

 

In addition to personal customers receiving new cards, business customers will also be issued new machines. Some stores, such as Walmart, Piggly Wiggly, and both Kwik Trips in Prairie du Chien, for example, have already made the switch. Pamphlets and website information will be provided through a cardholder education campaign to smooth the transition to EMV cards.

 

An EMV card is inserted into a terminal, and not swiped. It remains in the terminal for the duration of the transaction, and then it pops out for the user to remove. A chip, embedded above the first four numbers of the card, contains a distinctive issuer key, which is accessed by the reader in the terminal. Using the key from the card and data from the transaction, the chip creates and sends a unique code, or cryptogram, to the processor’s host with the approval transaction, allowing the issuer to validate that the card is legitimate and not counterfeit.

 

“Each key is different per user, per transaction. So it’s a one-time use and can never be used again,” explained Kari Kronberg, card manager at Peoples State Bank in Prairie du Chien. “If someone were to steal or compromise the machine, it would be like stealing data that’s already been used. The data simply can’t be recreated.”

 

Kronberg noted that using the EMV slot is not necessarily something people have to do, as the current swiping method will remain available through Oct. 1, 2016, at many ATMs and through Oct. 1, 2017, at many gas pumps. “But it’s a way we can prevent counterfeit cards from being made and try to avoid situations like what happened to Target, where data was taken from the machines and millions were affected,” she stated. “We have to get people to understand it’s important to do it this new way for their own personal safety.”

 

According to Kronberg, Oct. 1 of this year is when the liability will shift from cardholders to the businesses hosting the terminals. If fraud was still to happen, and the cardholder used the EMV card correctly, the liability would fall on the least EMV capable party, which is now the business. “If our customer traveled somewhere that didn’t have the EMV capable terminal, that business would accept the liability, and not our customer,” she said. 

 

Though new cards won’t be mass-reissued for several months yet, a number of local customers already have them at their fingertips. For the Prairie du Chien School District group traveling to Europe (leaving last week), EMV cards had to be ordered for those individuals, Audet said.

 

“We have the best interest of our customers in mind. That’s why we’re participating in this,” Audet said, noting that online purchases will remain risky despite the switchover to EMV cards. “Fraud is very common and it doesn’t just happen in the big cities. It happens everywhere.” 

 

Kronberg agreed. “It affects people here and it takes people a lot of time and effort to get it all straightened out if they have their money stolen. It can be very frustrating for customers, merchants and the banks to investigate and prosecute fraud. That’s why these EMV cards are going to be such a good thing.”

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