The era of the credit card signature is coming to an end: Both Visa and Mastercard are on track to transition to a PIN-and-microchip based system for in-person payment by October 2015.
Under the new method (below), you’ll be asked to insert your card into an ATM-like slot rather than swipe it. The POS device will read your credit card and its embedded security microchip to identify your card as legit. Then, you’ll enter your personal identification number, like you do with debit cards, to complete the transaction. The new system is already in use throughout much of the world.
As we learned from last year’s hack of mega-retailer Target (and others), it’s all too easy for the bad guys to steal our data and make cloned credit cards. Adding another level of security may not deter all thieves, but it should send plenty in search of easier targets.
If you’re interested in reading more on credit cards of the future, Wall Street Journal's Corporate Intelligence blog has a detailed interview with Mastercard’s Carolyn Balfany. You can also read up about chip and PIN at the Mastercard website.
[Credit card terminal via Shutterstock]