Chip Versus Strip: Examining The New Debit Cards

Recently, financial institutions across Canada began mass-producing new debit cards, and sending them to their customers. Each new card contained something previous generations hadn't- a debit chip. Now, instead of swiping the strip on one's card, most businesses will have the customer insert it into a chip reader.

But why the change? 

Granted, it's not an entirely new technology, or even an entirely new idea. The technology's been around for a while now. The first chip cards were actually developed some time in the 1980s, and have actually seen some use in part of Europe. (Cardwerk). We've had the capability to produce the new cards for at least a decade, but we've only recently started to do so. We're told that the chip cards are somehow better than the old cards, but in a lot of cases, we aren't given specifics.

Added Security of New Debit Cards

These two buzzwords, along with "increased  protection" are by far the most common reason given for the change.But what do they mean, exactly? Just how do the new cards protect us from fraud any better than the old ones? 

Mostly, it has to do with the complexity of the chip versus the complexity of the strip. The embedded silicon chips are far more intricately designed than the older magnetic strip. Naturally, this makes them far more difficult to counterfeit.

Furthermore, according to Interac's website, "Chip cards will have processing functions and will work together with chip capable terminals and ABMs to ensure a highly secure transaction by validating both card and cardholder, providing increased protection against debit card fraud" (Interac). Presumably, this means that said chips contain some sort of security software. So even if a criminal can make a counterfeit chip, it would be useless without the data encoded on the authentic chips. This is an element that isn't shared by the strips; they tend to be easy to manufacture and therefore easy to counterfeit. 

Finally, the chips will also be used to include pin codes on credit cards; either in addition to or in lieu of signatures. 

Durability of New Debit Cards

I'm sure there are at least a few of you who've had to have a debit card replaced because, of all the things, the strip wore out. It's not really all that surprising that they would. I mean, they're constantly being rubbed up against the sides of your wallet/other cards in your wallet; not to mention the friction created when the cards are swiped. Eventually, they just start to fade.

The chips don't really suffer from that problem. Granted, they can still be damaged- if you go and snap one of them in two, there's a very good chance it'll stop working. Just the same, they'll last quite a bit longer than the old strips. 

Functionality of New Debit Cards

This is just a bit of extrapolation on my part, but given that these are actually computer chips embedded in the cards, your bank card might eventually be able to do a lot more than just access your funds. It's anyone's guess what other uses the chip could eventually be put towards, but the potential definitely exists.

Final Word of New Debit Cards

It's been made pretty clear to consumers across Canada that this isn't something we can really ignore. Though the goal is to eventually replace magnetic strip cards completely with the new smart cards, the transition is...not necessarily a smooth one. Still, the added protection and longevity of the cards is a nice touch, and if all goes as planned, there may come a day when the magnetic strips will be a thing of the past.