The truth about consumer awareness of chip-enabled credit cards

(BPT) - A giant change to the daily shopping experience is taking place in the United States in the battle to fight fraud. And research shows Americans know little about it.

The shift to chip-enabled credit and debit cards and a new point-of-sale process, where customers insert or “dip” their card into the machine versus “swipe” the magnetic stripe, is great news for consumers and businesses. It attacks security and fraud vulnerabilities that affect an individual’s personal and financial information and a business’ bottom line. But as important as this shift is, a new survey sponsored by CA Technologies, shows that American consumers are either uninformed or misinformed about the benefit. The survey was conducted online by Harris Poll on behalf of CA Technologies in November.

More than half (59 percent) of all U.S. adults with an existing debit or credit card have been issued a new card with chip technology. However, that same research shows only 41 percent know what the benefits are, and even fewer (37 percent) say their card issuer provided information or education on how to use it.

Further highlighting the lack of understanding, the survey showed that more than three quarters (77 percent) of those who have received a chip card, which is designed to combat fraud when used to make purchases in stores, believe it will better protect them from fraud during an online purchase.

“I work in the security industry, and it’s important for me to understand what is happening with my credit card information,” said Carol Alexander, specialist in payment security at CA Technologies. “But I wasn’t surprised to learn that many Americans lack understanding of the new chip card benefits. Nor was I surprised to hear that many think these new cards help protect online transactions.

“Because your card is not ‘present’ in an online transaction, chip technology has no affect. Merchants and card issuers need to use different and specific security measures where the card is not present during the transaction, such as with online commerce,” Alexander said.

Will new chip cards influence holiday shopping?

Seven in 10 of those issued a new chip card say the new chip cards have had no/not much influence on how they will do their holiday shopping. The poll shows consumers who intend to shop for gifts this holiday season plan an even mix of online and in-store activity with 27 percent saying they will shop mostly or completely online, 25 percent saying mostly or completely in stores, and 47 percent saying an even mix of online and in store.

The new chip cards are part of the U.S. shift to the Europay, MasterCard and Visa (EMV) specifications for smart card payments and acceptance devices.

This data comes just over a month after the October 1 deadline where liability for card-present fraud will shift to whichever party is the least EMV-compliant in a fraudulent transaction – the merchant or card issuer.

To learn more about card-not-present fraud, payment security technology and the CA Technologies survey, visit CA.com.

The survey was conducted online within the United States by Harris Poll on behalf of CA Technologies from November 4-6, 2015 among 2,071 adults ages 18 and older, among whom 1,101 have been issued a chip credit/debit card. This online survey is not based on a probability sample and therefore no estimate of theoretical sampling error can be calculated. For complete survey methodology, including weighting variables, please contact Leanne Agurkis at Leanne.Agurkis@ca.com.