Alex Hultine
Mr. Rueter
Economics A3
14 Dec. 2015
What’s That Chip?
We either have or will have very soon a credit or debit card. It’s something that comes natural with age these days. But how much longer will it be before they are a little safer? Well the answer is, right now. The little micro chip that is in one of the corners on the card? That is what just might save you from losing some Money. There is only a few problems to this, however to every issue, there will be answers.
First off, as of October or 2015, all companies were to start using a chip reader machine. But according to NBC News, one consumer, “Edgar Dworsky, founder of the website ConsumerWorld.org, wondered why he's rarely asked to dip his smart cards, despite an Oct. 1 "deadline" for retailers to adopt the new standard”. But later on, NBC went on to say that “a lot of companies will tell you that they aren’t ready for the chips, but that should eventually change”. And that is true, as America has a demand for the safety of their citizens, everything is working out.
But some companies that have no control, however, are the ones that are getting is the worst. Netflix, the popular app for your phone, tablet or laptop for watching TV shows and movies, got it worse than most companies. “Netflix chief Reed Hastings blamed changes at credit card companies for subscribers leaving the service as the company reported disappointing growth figures on Wednesday”. Netflix has no say with which way of payment they charge their customers. The only option they have is the “manual” way using the numbers and security code. But, with these new chips, Netflix “had predicted US subscriber growth of 1.15 million users; in fact it had added only 880,000 in the third quarter of 2015, down not only from its prediction but from its third-quarter 2014 increase of 980,000. The company’s stock price plummeted nearly 12% on the news and then bounced back somewhat”(the guardian). Though, with more chips in more cards, the supply of customers that Netflix lost, will be replaced soon.
But the question to answer is to what good does this do for the economy? "These new and improved cards are being deployed to improve payment security, making it more difficult for fraudsters to successfully counterfeit cards," says Julie Conroy, research director for retail banking at Aite Group, a financial industry research company. "It's an important step forward"
(credit card). So all-in-all, the credit card chips are there to protect our identities but for the most part, will not change the economy. Companies like Netflix will go up and down so long as they are around. Once people know how to use the chip cards, everything will be fine.
Work Cited
"8 FAQs about EMV Credit Cards." CreditCardscom News. Web. 15 Dec. 2015
"Few Retailers Using 'Chip' Credit Card Security Feature for Holidays." NBC News. Web. 15 Dec. 2015.
Theilman, Sam. "Netflix CEO Blames Credit Card Changes for Subscribers Leaving Service." The Guardian. Web. 15 Dec. 2015.
I can easily relate to this post because at my work we are set up to take the chip, but our computer system is unable to take the data as payment. Many of our customers find it inconvenient and have asked us to install it as soon as possible. I would be curious to learn more about the technology behind it and how it keeps our bank accounts safer. I believe that if more people understood the chip the demand would increase and firms would be forced to update their technology to meet the consumer's demands.
ReplyDeletePersonally I have always used cash to pay for things. I really don't trust using a credit or debt card, you can have the card taken from you so easily and you wouldn't even know it until you went to use it. Someone could also take your card and use it and give it back before you noticed, and after that point you can't really do much. I think the chip would make people feel more secure about using credit or debit cards. But I will still stick to using cash.
ReplyDeleteAt my job I hear many complaints about the chip. Even though it is "more safe" than the traditional cards it has caused many problems to our systems. We have had them for quite some time now and people complain that there are not enough people that have it for them to remember to use them. They also keep breaking the machines to the point that they are not usable and we have to hand type in some of the cards on the registers which takes much longer to do and holds up the line and upsets the customers. I really think for the chip cards to be beneficial they need to fix a lot of the problems it is causing to stores that actually use them.
ReplyDeleteAt my job I hear many complaints about the chip. Even though it is "more safe" than the traditional cards it has caused many problems to our systems. We have had them for quite some time now and people complain that there are not enough people that have it for them to remember to use them. They also keep breaking the machines to the point that they are not usable and we have to hand type in some of the cards on the registers which takes much longer to do and holds up the line and upsets the customers. I really think for the chip cards to be beneficial they need to fix a lot of the problems it is causing to stores that actually use them.
ReplyDeleteI was curious as to why these chips have been added into the card so I thought that your topic was interesting. Some places don't have the technology installed while some companies do, which I don't understand how that is. I feel that many consumers don't understand the chip and what it all means because not everyone has them. If the consumers understood, the demand would increase and businesses would have no choice but to update the systems to make their consumers happy.
ReplyDeleteI definitely agree that these chips will make people's money safer. If we all had adopted this new form of payment sooner, maybe less would have suffered from someone stealing their information. In the future I would say that eventually, everyone would use this and maybe even further on, there will be an even safer form of payment.
ReplyDeleteThe addition of chips to debit and credit cards is a great way to increase security and prevent fraud. If companies want to keep business they must make the change because the demand for personal security has increased. Though the cost for the reader may be higher now, the outcome will beneficial because consumers will fell safer purchasing. Companies will also decrease their chances of becoming a liability if fraud does take place at their store, costing them less money in the end since they will not have to pay fees to replace the money lost through fraud.
ReplyDeleteThe addition of chips to the cards is a great way to protect your dollar. Although it will hurt some smaller businesses, it helps the consumer. Smaller business will have to adapt to this new technology. The companies who produce the chip readers will benefit from companies having to upgrade their readers. Hopefully this chip on our credit cards will prevent credit card fraud.
ReplyDeleteI think that the new chip for credit cards will be a very good thing. Credit card security seems to have decreased over the last years so to ensure security to people will be a good thing. Working in retail, people ask all the time if our company is using the chip yet. We haven’t started using it yet but are supposed to soon. I don’t completely understand how the chip works but if it will keep people’s accounts safer, they are a good thing.
ReplyDeleteOut of curiosity, are restaurants using the chip? Or can they continue with the way they did things before the chip? Also, which companies (or banks) are ones with the chip? I just find this all interesting, because the chip readers are so annoying. For example, one store I went to I had to try a few times to actually pay since the machine wasn't working, or I pulled it too soon or too late. Partly my fault, but still annoying.
ReplyDeleteI agree with these credit card chips because I do think that if we would have had them sooner there would be less people in trouble from someone taking their information and identity theft. The companies who are already using this chip will most likely benefit from using this.
ReplyDeleteI can relate to this very well. At my old job people would complain that it's stupid that there are multiple reasons that they want control of there money. I believe that it is beneficial and that it can help people have security on there cards because of the type of people that want to have there money safe.
ReplyDeleteI always wondered what those little chips were for! This was a great attention getting story. I never understood what their purpose was, when you could just as well swipe the card or type in the numbers. There's no difference, right? I was very wrong. Personally, I work at a pizza place. When people ask for delivery, I have to take their card number over the phone right away; we don't have little swipers that we bring to the door. So, we have to take the manual card number up front. As of now, it hasn't affected our business much. People will still get pizza somehow. But what if in the future, the numbers don't exist anymore? Our pizza place will have to change. The numbers are definitely a huge safety issue. If I take someones card number over the phone, who is to say that my workplace won't keep that number forever? Excellent post!
ReplyDeleteIt is awesome to see that companies are now trying to protect our dollars. As there are tons of different issues that are currently happening now. Even tho that this will hurt the smaler companies in which they have to buy and learn about the new technology. This will still help and protect the consumer's dollar. Overall this is well written and well done in stating the economics behine chips on the new credit card preventing fraud.
ReplyDelete