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ATMs to take ‘chip’ cards, or else

By Claes Bell, CFA · Bankrate.com
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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74 Comments
s rose
September 26, 2012 at 7:11 pm

Will just exclude direct deposit & use cash

J Spencer
September 26, 2012 at 3:44 pm

I'm all for the fingerprint or some suitable thing for id. And no extra fees. Been a victim and is a nightmare. Time to do something.

Obediah
September 25, 2012 at 11:00 pm

I agree with Mr.Vest. It was predicted some years ago that this country would enter into a new phase. It's called "The Cashless Society". Then the owner of 666 can have total control, if you know what I mean. That new card will have all the information he needs. We are well on our way folks.

tropikitty59
September 25, 2012 at 1:25 pm

I like the idea of better security. Banks want customers to keep their fund in them so that they (the banks) have funds to invest and play with. The idea of additional fees is a turn off. When B of A started making noises about charging their ATM card holders fees for using the card at the B of A machines I was VERY unhappy. I really do not want to have to hoard my money under my bed, because the banks want to keep taking it. They get to use it for free and make a profit. Great - that is the name of the banking business game, but using it to make a profit through investments then keeping the customer's money and the investment profits is NOT RIGHT. Go for the security, forget the nonsense about sticking it to the customers again and again.

sharonlee
September 25, 2012 at 12:41 pm

I totally agree with Jim Davis, want security and totally get rid of fraud on these cards, develop a small fingerprint machine(make it compatiable with one of the finger prints on right hand or left with this notation on the card and I also have other ideas you can contact me for the....

1ofWethePeople
September 25, 2012 at 11:50 am

What are vendors thinking nowadays??? We are responsible for what we pay them for??? ATM Cards are great for them as they do not have to deal with paper. If they cannot secure an account then don't open ATM's for your bank. What happened to the Customer is always right? I have enough trouble with identity theft because vendor stiffs don't protect credit and ATM cards when I buy on line. As a result I have been asked to purchase credit protection and look at my credit score in which I'm charged monthly. I have the sincerest feeling that this whole computer thing will implode sooner rather than later. You want toys go to toys R us. At least you'll get your monies worth and they allow returns. Analogy time. If I were a creator of Virus software and things were slow, money was tough. What could I do??? Go over to the computer and create a Trojan that would need treatment right away. And guess who would have that software right away??? ME.

Richard Vest
September 25, 2012 at 10:53 am

Talk about your 666 the greet just keeps on coming

Cynthia
September 25, 2012 at 10:20 am

You're going to be phasing out checking and charge me higher ATM fees. Seems to me secure access is the banks' responsibility and needs to be ensured from the get-go. Are you seriously thinking I should pay you more to access my money. ATM fees are frankly at the top end of what is reasonable as they are currently. ATMs were supposed to lessen the costs of access as they allowed banks to eliminate staffing costs. Banks have mined every little nugget of cash they can from customer pockets with these excesses. It will reach a breaking point. At this rate, you will force me to make a singular withdrawl of every dollar of my directly deposited funds after I make my necessary electronic funds transfer and....shudder....hold onto cash.

Jim Davis
September 25, 2012 at 8:19 am

There's only one way I can think of to ensure proper ID.......they need to develop technology for a "FINGERPRINT" scan. Think about it !!!!!!!!!! There's your sign BOA, MC, Dicover (that's funny). By the way, if you need any more security advise just let me know.

naynay
September 25, 2012 at 8:09 am

The consumers' proverbial ' can't win for losing'