The Processing Time for Chip Cards is about to Shrink
Ever since banks stuck chips on millions of U.S. credit and debit cards last year, shoppers have spent a little more time waiting at the register and a lot more time complaining about it. On Tuesday, Visa Inc. said it's trying to fix that.
The world's largest payments network - which long pushed the chips at the source of the consternation - will offer a technology upgrade to cut the time people must leave their cards in machines to roughly two seconds or less. The network has started talking with major terminal manufacturers, and they've been receptive, said Stephanie Ericson, Visa's vice president of risk products.
Networks including Visa and MasterCard Inc. began calling for a migration to chips years ago to head off counterfeit cards. The underlying technology - called EMV for founders Europay, MasterCard and Visa - generates new codes for each transaction, while the codes on magnetic stripes are permanent and can be copied and stored by hackers for later use.
Estimates vary for how long each chip transactions take because it also depends on terminal's connection speed. A November study by merchant services firm Harbortouch estimated the average time is as long as 10 seconds, versus two or three seconds for using the magnetic stripe. The survey of more than 5,000 adults in the U.S. found 20 percent of consumers consider transaction time the top concern when using chip cards.