Peoples Bank is not alone in its quest to protect you and your family from financial fraud. Technology supported by the major credit card companies in other countries has finally made its way to the United States. This has made it possible for Peoples Bank to provide advanced protection for customers’ credit and debit cards.

The Chip versus The Mag Stripe

Some of you reading this will remember listening to music on cassette tapes. The tape would be drawn past a magnetic reader that would convert the material on the tape to sounds. Much the same process is used with credit and debit cards that have only a magnetic stripe on them: a simple reader is used to collect “payment authorization”, information about you and your card when the stripe is run past it.

The problem with that decades-old magnetic technology is that criminals figured out how to get that information on debit and credit cards’ mag stripe quite easily – and without your knowledge. Security experts call the technique “skimming” because only a quick, light touch is needed to read the mag stripe or even to make a fake mag stripe card.

But, that’s the way it used to be. New debit and credit cards from Peoples Bank have a special chip on them that can’t be accessed by a casual reader. This chip contains your payment credentials in an encrypted format, making it far more difficult for criminals to steal.

  • The new chip card won’t affect your legal rights that protect you from credit and debit card fraud.
  • Some chip cards still have the mag stripe on them.
  • You will still need to review your statements regularly and report fraudulent charges immediately.

Some merchants will not have their new card readers installed yet so you can still use the mag stripe – the new credit cards are just now taking off in the US. But, if their equipment supports the chip, it’s better to get in the habit of using it. Transactions with chip cards take a bit longer in line than the old mag stripe cards took, which is a good thing. A few seconds to protect your card credentials is nothing to the headache when someone steals from your account!

Why Now?

The laws governing card fraud were recently changed to require chip cards. Banks, credit card issuers and merchants are all working together now, and investing heavily, to reduce fraud. But it’s a slow process. Soon mag stripes will join cassette tapes and become a distant memory.

The entire country is lumbering toward the more modern and secure debit and credit card environment. There are a lot of moving pieces, from the manufacturers of the chip cards and readers, the issuing equipment, and the logistics needed to get all those former mag stripe readers replaced with new ones. There must be many millions of cards and merchant readers that have to be replaced!

Peoples Bank is sending as many of the new chip cards to customers as quickly as possible. The roll-out is expected to take several months – partly because the cards can’t be produced fast enough – but also because such a serious process needs to be carefully and accurately executed.

New cards come with same need for watchfulness

The new chip cards solve an important problem. But they don’t remove all the risks. Diligence is still required. Criminals are not going to give up trying to steal from you.

The new cards are an important part, but not the complete package of protection against credit and debit card fraud. Everybody must to remain diligent to signs of “creative” criminal activities: banks monitor transactions for suspicious activities, merchants invest in new equipment and customers monitor suspicious activity on statements. Continue to protect yourself by taking the same basic precautions you have always done. Regularly monitor your debit and credit card statements and report suspicious activities immediately!

Want to know more about chip card technology?

Chip cards, also known as EMV chip cards, were created from the EMV standard developed first in Europe and though a collaboration of major card companies. EMV is the first initiative of the three companies initially involved (Europay, MasterCard and Visa), but many other card issuers have joined to participate in the program. Your American Express and Discover cards will also use the new chip.

The chip stores data via integrated circuits rather than the magnetic stripe, increasing security and opportunity to protect its contents.

Read about the history and technology behind EMV Chip cards on Wikipedia, or get some simple questions answered by the Consumer Financial Protection Bureau on their page What’s that chip doing on my credit card page?

Peoples Bank will continue to provide information about their fraud protection resources on www.PeoplesBankNC.com.