New Standard of Security

October 26, 2015

When it comes to our debit card use, change is coming. You may have heard of, seen, or already received a card with EMV enabled technology. If not, here are some important details to know about chip cards, a new standard of security and how it will affect your Sterling State Bank accounts.

At Sterling State Bank, we want to ensure your financial security by issuing EMV chip cards to all of our customers. This change will be happening over the course of the next few months, with all customers receiving their new card by early 2016. The new cards will be upgraded at no cost to the customer, help prevent in-person card fraud, and have an extended expiration date,” explained Malachi McNeilus, VP of Operations at Sterling State Bank.

The acronym EMV stands for Europay, MasterCard, and Visa. It has become the global standard for credit card and debit card transactions. While many other countries have already embraced the EMV chip cards, Fox Business reports that “the U.S. is the last major market still using the magnetic-stripe card system.” EMV enabled cards work in a different way than the magnetic-stripe cards that many consumers are used to. Instead of swiping the card through the terminal, a chip card is inserted into the chip-enabled reader and remains in the reader until the transaction is completed. It is important to note that if you remove your card too quickly the transaction will likely be denied, the process will not be quite as quick as the magnetic-stripe swipe.

The reason that the chip card needs to be in the card reader for longer is because there is more complex communication occurring between the chip and the transaction terminal. Unlike a magnetic-stripe card, EMV enabled chip cards generate new information used to verify your transaction each time you use your EMV debit card. As the final step in the purchase process, customers will be required to either provide a signature or enter a personal identification number (PIN) to complete their transaction. Our chip cards are issued with a PIN but depending on the merchant you will be prompted to either sign or use your PIN.

Another important thing to remember is that you, as a consumer, are never liable for fraud on a consumer debit card. All Sterling State Bank consumer debit cards have zero liability for unauthorized transactions that are reported in a timely manner. Make sure to report any unauthorized transactions as soon as possible and your account will be credited for the amount you lost. This is one of the ways that debit card transactions can be more secure than cash transactions.

Debit card payments grew from 8.3 billion in 2000 to 47.0 billion in 2012 according to a report from Creditcard.com The need for additional security has grown along with the increase in debit card use.

The transition to EMV will continue over the next few years, as merchants complete the process of upgrading to chip-card readers in stores. You will still be able to swipe your card if the merchant you are shopping at has not upgraded their card reader to support EMV transactions. Until all merchants have upgraded to support EMV transactions, our experience as customers will vary from store to store.

Because EMV debit card transactions require your debit card chip to remain in contact with the merchant’s terminal during a transaction, it is important to remember to retrieve your debit card at the end of each transaction. A PIN is still required for all ATM withdrawals. Please see the chart below that outlines the differences between magnetic- stripe and EMV transactions.

As a reminder, Sterling State Bank debit card holders can change or set their PIN number any time by calling: 800-567-3451. Sterling State Bank remains committed to creating and maintaining a safe banking experience for all our customers, please feel free to contact us if you have any further questions.