Chances are good that you already have a credit card with a microchip in it. Transactions using the chip require you to enter a PIN rather than signing a receipt. It steals from you the tactile pleasure of scrawling your chicken scratch on a scrap of paper, but otherwise the new system is intended to be less susceptible to fraud.
Starting in October 2010, Canadian merchants without point of sale systems that accept the microchip-based credit cards from Visa and MasterCard will assume liability for fraudulent transactions if a chip-based card was presented.
Credit card fraud in Canada is over half a billion dollars per year.
My personal and business credit and debit cards all have chips in them. What has surprised me is how often I have seen vendors struggle with chip-aware point of sale machines, frequently falling back to the swipe + sign method because they cannot get the card reader to work. The information I’ve seen states that the credit card companies will also hold merchants liable for fraud in cases where the chip + PIN was not used successfully in a transaction because of inadequate staff training.
Canadian business owners, take heed. Visa and MasterCard have half a billion reasons to shift as much liability to you as possible. Bite the bullet and get your systems upgraded.
(photo courtesy of Ingorrr)