CNN — A major transition is underway for retailers and consumers. It’s all aimed at protecting credit card transactions from fraud, and includes a key deadline on Thursday.
After a series of high-profile breaches, new liability rules are about to take effect regarding credit card fraud.
Starting Oct. 1, fraud liability falls to whichever side hasn’t yet made an upgrade to new technology: the bank of the retailer.
This change, consumers won’t notice.
Another change they will.
Millions of consumers are receiving new credit cards: chip cards, smart cards, or EMV cards already used in many other countries.
Embedded chips hold payment data and assign each transaction an individual code, adding an extra layer of security.
The transition for the U.S. is big and Matt Schulz of CreditCards.com says that’s why it’s likely to be slow.
"It’s the biggest change in the way we use credit cards in decades, and people aren’t ready yet. There’s a lot of confusion out there."
Doug Johnson of the American Bankers Association says that about 70 percent of cards will be chip-enabled by the end of 2015, but less than half of retail devices will be equipped to handle them.
So swiping will be an option for awhile.
"You’ll still see the mag stripe on the back of the card, so essentially, if the point-of-sale device hasn’t been refreshed and brought new with the ability to read the chip, the point-of-sale device will still be able to read the mag stripe."
Even after chip transactions become the norm, Schulz says the same rules apply.
"Consumers definitely have to take the same precautions that they’ve been taking for years, even with this new chip card because the most important thing to remember is that nobody cares as much about your money as you do."
That includes checking online statements and credit reports regularly, and when something looks suspicious — flag it to the card issuer.