MasterCard and Visa have, reportedly, agreed to switch to chip-based cards by October 2015, following which the swipe and sign cards will not work.
Following the switch, users will stop signing credit card receipts, but will insert chip-based cards into the reader and enter a PIN number to authorise the transaction.
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The move by the companies came after a Senate Judiciary Committee hearing was set up following the recent security breach witnessed at Target and Neiman Marcus that resulted in compromising private credit and debit card information of millions of customers.
According to some executives, the introduction of chip-based cards will prevent such attacks, as the card information will be useless without the chip.
MasterCard Worldwide US product delivery group head, Carolyn Balfany, said if a merchant uses the old system, they can run a transaction with swipe and signature method, but will be liable for any fraud transactions if customer has chip card issued by bank and vice versa.
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By GlobalData
