Banks fighting to corner market for EMV chip charge cards

In an effort to attract customers that frequently travel, banks are rolling out a new line of EMV chip credit cards. The chips are actually a microchip and integrated circuit built into a credit card instead of a traditional magnetic stripe. Magnetic stripe cards are really only used by those backwater, un-evolved hill-folk called Americans; most of the world has gotten on the EMV chip bandwagon. Post resource – Banks fighting to corner market for EMV chip credit cards by MoneyBlogNewz.

Fixing the international credit card issue

American credit cards are hard to process by European merchants because rather than having common EMV chips in them, they have magnetic strips, reports Bloomberg. This is what many who travel regularly complain about. Both Wells Fargo and JPMorgan Chase have decided to fix this issue. As a service, the high end credit cards will have EMV chips in them. This summer, Wells Fargo will pilot the program while having EMV chips put into the cards of 15,000 customers. Any high net worth clients in the Palladium program can be getting EMV cards from Chase bank who isn’t even piloting it.

The money lost in Europe

The EMV card is necessary. It is not a joke to laugh about. In 2008, $ 4 billion in losses to merchants and $ 447 million in card provider revenue was lost because of the technology gap as few merchants in Europe take magnetic strip cards. Wikipedia points out that Smart Cards are not just like magnetic stripes. They use “Chip and PIN” technology. The information for the user is stored in Chip and PIN cards with a small computer chip and circuit board about 3 by 5 millimeters. A smart card reader is carried by merchants to read the card. The user simply gives their Personal Identification Number, and the sale is made. The benefit is that smart cards are less easily corrupted by thieves.

Card businesses already have them

The EMV chips were developed between Eurocard, MasterCard and Visa, calling it “EMV,” which is just one type of smart chip. There are EMV chips in American Express cards already. Its Express Pay line has the chips. Europe has more of the smartcard reader technology than the U.S. This is because America has trouble adapting technology from other countries sometimes. All consumers will eventually have access to EMV chips at JPMorgan. The business is just giving them to high end consumers before this.

Citations

Bloomberg

bloomberg.com/news/2011-04-14/jpmorgan-pushes-chip-cards-to-wealthy-in-race-with-wells-fargo.html

Wikipedia

en.wikipedia.org/wiki/EMV