Yesteryear’s black magnetic stripe found on the back of nearly 2 billion credit and debit cards is about to get a much-needed makeover.
Citibank is rolling out a new credit card featuring two buttons and tiny lights that allow cardholders to choose whether they wish to pay through rewards points or charge an item to their credit card. The cards, dubbed 2G, for second generation, contain a battery with a four-year life, an embedded chip and, buttons which, according to a New York Times report, required nearly a year and hundreds of thousands of dollars to develop.
Citibank’s minicomputers-in-a-card technology is only one of many new-fangled approaches to processing payment that promises to displace the age-old magnetic stripe. Credit card and debit card companies in Canada began migrating to chip technology more than a year ago as part of a fraud-prevention strategy. Chip technology promises to greatly reduce fraud by requiring cardholders to enter a personal identification number, or PIN, instead of a signature, making it virtually impossible for card information to be copied by unauthorized users.
Essentially, chip-enabled cards contain a microchip that's virtually impossible to duplicate. Chip cards work with chip terminals to help facilitate a secure transaction. In fact, cardholders don't even need to hand over their piece of plastic to a cashier. Instead, they simply insert their card into a terminal, enter their PIN when prompted, wait for their purchase to be approved, and then promptly remove their card from the terminal. Although popular in Canada and Europe, chip technology still has to find its way into Americans’ wallets.
Speaking of wallets, Sprint Nextel subscribers will be able to link their credit cards and other traditional payment methods to a mobile purchasing system coming next month. Scheduled for launch in mid-November, the Sprint Mobile Wallet lets consumers buy physical and digital products using a Sprint phone. Using a universal PIN to make purchases using their Visa, MasterCard and Amazon Payments accounts along with other payment methods, consumers can avoid having to enter their credit card information with every purchase. Instead, they simply select Sprint Mobile Wallet at checkout, enter their PIN, and choose their payment method or account from those saved in the Sprint Mobile Wallet.
Edited by
Tammy Wolf
