Research of the Week: Chips Aren’t Hip – Yet
Most credit and debit card owners don’t know what those little computer chips are for – and many don’t like them
Each week, Consolidated Credit searches for financial research that can help you deal with your debt and budget. This week…
The interesting studies
More than half of adults in this country now own credit and debit cards embedded with those microprocessors called “EMV chips.” But most of them have no idea what these chips do, according to a poll by software company CA Technologies.
Meanwhile, credit card experts are worried about consumer reaction when they try to swipe their brand-new cards in stores this holiday season, says a study by point-of-sale company Harbortouch.
The big results
While 59 percent of adults carry plastic with EMV chips, only 41 percent “know what the benefits of the chip card are,” CA Technologies says. One possible reason: Only 37 percent “say their card issuer provided information or education on how to use it.”
As holiday-shopping crunch time approaches in brick-and-mortar stores, retailers are fretting about long lines of grumpy customers. Why?
“On average, it takes between seven to 10 seconds to pay using a chip card versus 2-3 seconds to pay using a traditional swipe credit card,” says Jared Isaacman, Harbortouch’s CEO. “While seemingly small, during busy times like the holidays, these increased processing times could add up quickly. It’s possible we’ll see longer check-out lines or even cart abandonment by those unwilling to wait. Retailers could feel the pinch.”
The fascinating details
Sadly, what card owners think they know about EMV chips is wrong – 77 percent told pollsters “they believe their new chip card will better protect them from fraud during an online purchase.”
“What’s most disturbing from the survey is that people think their chip card technology will help protect them in their online purchases,” says Carol Alexander, a CA Technologies marketing director. “The fact is a more secure point-of-sale solution, which the chip cards are supposed to offer, will spark an increase in online, card-not-present fraud.”
That’s because criminals take the easiest route to theft, and online retailers right now can’t avail themselves of the chip technology.
What you can do
If you’re shopping in crowded stores this holiday season, see if some stores are embracing what’s called “in-line checkout options.” That’s a fancy term for sending clerks roaming the checkout lines and ringing you up on portable devices – a common practice at Apple stores, for instance.
If you want to shop more efficiently – and more cheaply – consult Consolidated Credit’s Holiday Survival Guide.