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ATMs to take ‘chip’ cards, or else

By Claes Bell ·
Monday, September 17, 2012
Posted: 11 am ET

MasterCard announced recently it is going to ratchet up pressure on ATM owners to upgrade to machines that can read EMV-enabled cards. If you're not familiar with EMV, it's a technology standard that ups debit card security by incorporating a tiny chip into each card issued to users. That chip makes it harder to create counterfeit cards using stolen payment information, a popular tactic among thieves.

Under the MasterCard rules, ATM operators that don't install EMV-compatible machines by October 2016 will have a greater share of the liability for fraud that occurs on those machines using MasterCard-branded products. Essentially, operators will have to upgrade or pay a much greater share of the losses from fraud.

This has a couple of ramifications for debit card holders, who have a pretty big stake in card security, because consumer protections for debit cards are relatively weak.

Unlike with credit cards, if consumers fail to report debit card fraud fast enough, they face having to pay an increasingly large chunk of fraud losses. Plus, even if you do report debit card fraud with plenty of time to spare, you may still have to deal with significant financial hardship while the matter is resolved because of the way debit cards pull cash directly out of your checking account. So, if EMV adoption can cut down on the fraud, it stands to reason that debit card users will be better off.

The downside for customers is that there will be a huge tab for ATM operators to install the new EMV technology, and that tab will likely be paid by ATM users, in the form of higher fees.

What do you think? Are debit cards in need of a security upgrade?

Follow me on Twitter: @ClaesBell.

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September 20, 2012 at 10:28 am

This article was a great read. If I had to choose between a chip and some cash, I'd choose cash every time.

September 20, 2012 at 8:54 am

actually, the bad guys already have an electronic device that can count the money in your pocket and therefore know who to rob and which person is the most economically feasible target. In our present technology, the bad guys can already read the credit card chip from 50 feet away.( this is all thanks to our government crime fighters )

September 19, 2012 at 9:43 pm

i remember a time when there was an article about uses of debit/credit cards, the goverment would like to phase hard cash out so there would be no need to print money or coins, which is expensive to make. with debit and credit cards, they will be sure they get thier taxes even if you bought lemonade from the kid down the street. or loaning your child money for candy.

September 19, 2012 at 6:42 pm

If we all went back to cash, we the people could literally bring the banks to their knees and we the consumers would have the power. Remember folks a debit card is not a credit card, you're using your OWN money, the banks are profiting by not having to process checks; therefore they save millions of dollars, plus they charge you and they charge the merchants for running that debit card. When are people going to wake up and just use your own cash and not be making bankers more and more rich. Take back your power people and quit making the banker's RICH!!!

September 19, 2012 at 4:58 pm

gee kevin i thought you were serious there for a moment. no i don't think a change is in order right now. the comsumer is paying too much now. why make it worse.

September 19, 2012 at 4:18 pm

I think we should stop using money all together and go back to the barter system... Wouldn't that solve a LOT????

September 19, 2012 at 3:52 pm

Yeah, Kevin I agree. NO MORE Fees to use our money. Such a good idea, we should all take money out and keep in our own safe's.

September 19, 2012 at 3:43 pm

I just read an article yesterday that explained why these chips are not a good idea. There is a device where they can just stand next to you and get all your info. There already is one to do this with some cards. This article actually told you how to remove the chip. So where does the added security come from? Boy, I wish they would get their stories straight!

R. Titus
September 19, 2012 at 3:39 pm

It's a very small step considering the technology available.
If we can open and start a car with keys in our pocket, why couldn't we activate an ATM in the same way - Better yet, if they can find pets and wild animals with a small implant, why not give consumers the same option?

September 19, 2012 at 2:58 pm

I think it's great. They should charge more for me to use my own money. I think they should charge 75% of the charge. That would help those poor poor bankers.