I live out in the woods near a small town. I don’t spend much time in “the big city” which puts me behind on many current trends in the “real” world.
The credit union where I bank doesn’t offer chip cards but I do have one from Amazon. After spending a week in London I have now seen the total domination of the chip card. Everywhere we went it was chip or tap only – my swipe card didn’t work except at the ATM.
While I have seen the “tap here” or Apple Pay symbol in a lot of stores I had never seen anyone use it in my local area. In London I saw it used a number of times – the person tapped their phone on the small portable POS terminals that were in every bar or restaurant I visited.
Old Magnetic Strip Cards
Credit cards with a magnetic strip have been used since the 1960’s their technology is similar to that of cassette tapes, information contained in the magnetic strip of the traditional credit card doesn’t change. This allows criminals to use an inexpensive skimmer to steal your data.
Chip cards (really EMV cards – EuroPay, MasterCard & Visa) have a magnetic strip, but they also have a small computer chip. Information contained in the chip is encrypted and continually changes, making it difficult and costly for someone to duplicate even if the card itself is stolen. They’re processed differently than magstripe cards–dipped instead of swiped.
Contactless Credit Cards
Contactless credit cards use different technology than chip cards. Instead of a microchip, they use something called near-field communication (NFC). These cards use a radio antenna to transmit your information as you wave your card in front of a device that reads them to process your transactions. What’s more, instead of using a plastic card you can also use your smartphone to make payments with this technology.
The Liability Shift
In October of 2015 Visa and Mastercard started what is called the liability shift to get retailers and consumers to move to more secure cards. I am not sure how well it worked since it seems to punish the store and not the consumer but it moved forward store acceptance of the new more secure cards.
Ease / Speed of Use
This New York Times article digs into the fact that chip cards are much slower than the old magnetic cards. The new contactless (NFC) cards and phones are faster and easier and just think you will never leave the card somewhere again (yes I have).
What this means for Dash
As I have looked at NFC technology I realize it is the same for Apple Pay / Android Pay or my Android Dash wallet. This technology is what the Festy Contactless Dash Payment Wristbands uses. It is also used for the contactless cards recently announced by Wirex.
Once Dash overcomes the “onboarding” problem with services that allow you to transfer easily between fiat and crypto currencies (like Coinbase, Payza or Uphold) then the chip and tap cards and phones will allow us to use Dash most anywhere they are accepted.