Soon, you will need a personal identification number to use your credit card.
You won't hand over your card to be swiped by a retailer. You won't sign any sales receipts.
Instead, you will keep your card with you and dip it into a payment terminal and your purchase will go through only if you use the right PIN.
Canada is starting down a road along which European card issuers have travelled for several years.
By 2010, Visa and MasterCard plan to replace most credit cards that use magnetic stripes with smart cards that have an embedded computer chip.
Their goal is to gain more protection against credit card fraud. Criminals now easily copy the data contained on magnetic stripes and create duplicate cards.
Chip and PIN cards will be more secure. But no technology is completely safe from thieves.
Do you need to memorize another PIN? Or is it safe to adopt the same four-digit number you already use for banking and debit card payments?
"You can use the same PIN as you use for your debit card," says Mike Bradley, vice-president of products at Visa Canada. "It will be just as secure."
Some people have seen chip and PIN cards used in England, Ireland, Denmark, France or Spain.
The United States, however, is not taking this route. It's sticking with the less secure magnetic-stripe technology. This means Canada's new chip cards will still have the black band on the back.
Meanwhile, retailers worry about being held responsible for fraud losses if they accept the old magnetic stripe cards in 2010 once the chip card arrives.
Canada could turn into "fraud north" for criminals, especially those working near the U.S. border, says Derek Nighbor, senior vice-president of the Retail Council of Canada.
Retailers also worry about paying higher card fees to cover the expense of installing new payment terminals and computer systems.
"What are the costs to redo the whole point-of-sale infrastructure? Credit card companies may use those investments as a reason they need to increase their fees. But that doesn't wash with us."
The retail council and other industry associations launched a campaign this week to protest having to pay higher fees â which are hidden to consumers â for upgraded credit cards.
Nearly $2 of every $100 Canadians spend using credit cards goes directly to the big credit card companies, says the coalition (www.stopstickingittous.ca).
Our government does not regulate fees for organizations that accept credit cards. They're among the world's highest, the coalition complains. That boosts prices for products and services in Canada.
Card issuers are committed to the chip and PIN transition. They have no plans to slow down.
A pilot project in Kitchener-Waterloo shows good results, according to consumer research.
"In the first wave, 70 to 75 per cent of cardholders knew they had to enter a PIN, which was more secure than a signature," says Oliver Manahan, vice-president of advanced payments at MasterCard Canada. "In wave two, this has gone into the 90 per cent range."
Four million Visa cards â out of 31 million cards in total â will have chips in them by the end of this year, says Bradley. RBC Avion is an early adopter.
Nearly 2,000 merchant locations have terminals that accept the new chip cards.
Next week, we'll continue this exploration of card technology with a look at contactless payment and payments on your mobile phone.
Toronto Star (091408)
You won't hand over your card to be swiped by a retailer. You won't sign any sales receipts.
Instead, you will keep your card with you and dip it into a payment terminal and your purchase will go through only if you use the right PIN.
Canada is starting down a road along which European card issuers have travelled for several years.
By 2010, Visa and MasterCard plan to replace most credit cards that use magnetic stripes with smart cards that have an embedded computer chip.
Their goal is to gain more protection against credit card fraud. Criminals now easily copy the data contained on magnetic stripes and create duplicate cards.
Chip and PIN cards will be more secure. But no technology is completely safe from thieves.
Do you need to memorize another PIN? Or is it safe to adopt the same four-digit number you already use for banking and debit card payments?
"You can use the same PIN as you use for your debit card," says Mike Bradley, vice-president of products at Visa Canada. "It will be just as secure."
Some people have seen chip and PIN cards used in England, Ireland, Denmark, France or Spain.
The United States, however, is not taking this route. It's sticking with the less secure magnetic-stripe technology. This means Canada's new chip cards will still have the black band on the back.
Meanwhile, retailers worry about being held responsible for fraud losses if they accept the old magnetic stripe cards in 2010 once the chip card arrives.
Canada could turn into "fraud north" for criminals, especially those working near the U.S. border, says Derek Nighbor, senior vice-president of the Retail Council of Canada.
Retailers also worry about paying higher card fees to cover the expense of installing new payment terminals and computer systems.
"What are the costs to redo the whole point-of-sale infrastructure? Credit card companies may use those investments as a reason they need to increase their fees. But that doesn't wash with us."
The retail council and other industry associations launched a campaign this week to protest having to pay higher fees â which are hidden to consumers â for upgraded credit cards.
Nearly $2 of every $100 Canadians spend using credit cards goes directly to the big credit card companies, says the coalition (www.stopstickingittous.ca).
Our government does not regulate fees for organizations that accept credit cards. They're among the world's highest, the coalition complains. That boosts prices for products and services in Canada.
Card issuers are committed to the chip and PIN transition. They have no plans to slow down.
A pilot project in Kitchener-Waterloo shows good results, according to consumer research.
"In the first wave, 70 to 75 per cent of cardholders knew they had to enter a PIN, which was more secure than a signature," says Oliver Manahan, vice-president of advanced payments at MasterCard Canada. "In wave two, this has gone into the 90 per cent range."
Four million Visa cards â out of 31 million cards in total â will have chips in them by the end of this year, says Bradley. RBC Avion is an early adopter.
Nearly 2,000 merchant locations have terminals that accept the new chip cards.
Next week, we'll continue this exploration of card technology with a look at contactless payment and payments on your mobile phone.
Toronto Star (091408)