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Are Chips Set To Replace Magnetic Strips?

Posted on Feb 03, 2012

MasterCard is pushing merchants to help usher in the adoption of new credit and debit card technology.

EMV technology is considered to be more secure than magnetic strips because information is stored inside a chip and each transaction requires that the user enter a PIN.

Many foreign countries have relied on EMV for more than a decade, but it has failed to gain traction in the United States. MasterCard is trying to change that.

The company recently unveiled a road map which includes a path for migration from magnetic trips to EMV technology, according to a press release posted at Engadget.

We're moving toward a world beyond plastic, where consumers will shop and pay in a way that best fits their needs and lifestyles with a simple tap, click or touch in-store, online or on a mobile device, said Chris McWilton, MasterCard's president of U.S. markets.

One reason that the U.S. may be lagging behind much of the world in implementing this new technology is that major changes to infrastructure come with costs and delays that no company want to bear, according to a payments processing expert at US Dataworks.

MasterCard officials say that now is the time to change because there's a growing demand for stronger safeguards to secure card transactions.

The company's timeline shows that it plans to ensure EMV infrastructure readiness by April 2013. By that time, MasterCard hopes to have a more secure e-payment system in place at ATMs, online and for its mobile payment options.

Source: Engadget, January 2012