Chip Technology

How to Use Your CIBC Visa™ Card With Chip Technology

You will require your CIBC Visa card PIN to make purchases at chip terminals with your chip-enabled Visa Card.

When you are issued your new CIBC Visa Card with chip technology, you will also be sent a PIN to use when making transactions. It will become extremely important to remember your PIN, as more merchants replace their magnetic stripe point-of-sale terminals with new terminals that are enabled to process chip credit cards. Your PIN will be the key to using your chip-enabled card.

We encourage you to select or change your PIN to something known only to you and that's easy for you to remember. For added security, change your PIN from time to time.

How do I change my PIN for my CIBC Visa Card?

Purchases made at chip terminals using your chip-enabled CIBC Visa Card and PIN will no longer require your signature as authorization. Your PIN identifies you as the rightful holder of your card and is your secure authorization of the transactions. You will be asked to enter your PIN to make purchases at chip terminals in and outside of Canada and when taking cash advances wherever Visa cards are accepted.

At terminals not equipped with chip technology (non-chip terminals), in and outside of Canada, merchants will continue to swipe your card and request your signature as authorization for the transaction, as they do today.

When making purchases at a merchant or store where chip technology is available, instead of swiping your new chip-enabled CIBC Visa Card, your card will be inserted into the point-of-sale terminal. You'll then be asked to enter your PIN instead of signing a receipt- similar to how you use your debit card today.

You'll notice a number of minor differences compared to transactions with your current magnetic-stripe credit card. Transactions will now follow these simple steps:

1. Your card will be inserted into the chip terminal

2. Your card will remain inserted throughout the entire transaction. (Removing the card will terminate the transaction)

3. Instead of authorizing the transaction with your signature, you will be asked to enter your unique four-digit PIN

4. Upon successful completion of your transaction, you will be prompted to remove your card from the chip terminal and you will you'll receive a confirmation receipt

Merchants will be transitioning to chip technology over the next few years. The magnetic stripe on your chip-enabled CIBC Visa Card will remain for any transactions at stores without a chip terminal. In these situations, you will be asked to provide your signature as you do today
.

Visa Card

Visa Debit is a major debit card issued by Visa in the United Kingdom, the Republic of Ireland and other nations of the European Union. Prior to October 2004, the debit card was known as Visa Delta. Since June 2009, the major banks in the UK have begun issuing Visa Debit. Barclays, Bank of Scotland/Halifax, Lloyds TSB, and Santanderhave already issued the card. HSBC, RBS (including NatWest and Ulster Bank) are currently in the process of migrating to the card from the Maestro debit card.

The scheme is also used by many smaller banks and building societies (some of whom had also previously been Switch issuers) including the Co-operative Bank, First Trust Bank, Alliance & Leicester, Northern Rock, Reliance Bank, Nationwide and Coventry Building Society. In October 2010, CIBC became the first bank in Canada to offer a debit card (the CIBC Advantage Card) that offers access for point of sale shopping internationally, over the internet or by mail or telephone orders using the Visa debit network. It also provides access to the Interacnetwork for point of sale shopping in Canada.

Smart card, chip card

A smart card, chip card, or integrated circuit card (ICC), is any pocket-sized card with embedded integrated circuits. There are two broad categories of ICCs. Memory cards contain only non-volatile memory storage components, and perhaps dedicated security logic.Microprocessor cards contain volatile memory and microprocessor components. The card is made of plastic, generally polyvinyl chloride, but sometimes acrylonitrile butadiene styrene orpolycarbonate . Smart cards may also provide strong security authentication for single sign-on within large organizations.

MasterCard trialling smart credit cards with display & keypads

MasterCard has announced that it will be rolling out new credit and debit cards with integrated display screens, in an attempt to further prevent bank fraud.  The cards, developed by NagraID Security, resemble their regular counterparts, but – when an integrated button is pressed – display a one-time passcode that can be used to authorize online and phone transactions.

In addition, more complex versions of the cards can include a 12-digit keypad, and be used for electronic signature and authentication modes, as well as to enhanced security features such as challenge-response applications and PIN code card protection.  MasterCard even envisage being able to show customers their current balance on the card’s display.

Pilot schemes with the cards are kicking off in association with a Turkish bank, and if successful MasterCard are looking to spread the use of the technology to other countries.  The real irony is, in the middle of writing this article, my own bank called to say my card had been cloned – I guess these new display cards can’t come soon enough!

Press Release:

MASTERCARD and NAGRAID Security Introduce new Display Cards with Extended Features for Secure Banking Applications

NagraID Security developed a new family of MasterCard financial cards with integrated display screen allowing:

Optimized security for online transactions thanks to strong owner authentication

Display of the card balance on the card’s screen

La Chaux de Fonds, Switzerland, 10th June 2010 – NagraID Security, a subsidiary of the Kudelski Group (SIX:KUD), is pleased to announce that its families of display cards passed MasterCard’s (CSI – Card Structure & Integrity) approval process, thus demonstrating the required levels of durability, safety and compliance to ISO standards required for the commercial launch of banking cards and the introduction into MasterCard’s brand standards and rules.

The innovative Debit and Credit MasterCard Display Card looks and feels like a normal credit or debit card but comes with an additional small display and a button that enables card holders to use the same card for standard banking payment functionality and to generate second-factor one-time passwords (OTPs), thereby providing strong authentication.

The cards are very reliable and extremely simple to use. They offer optimal security to achieve banking transactions outside payment terminals using one single device.

This password generation technology complies with the requirements of MasterCard’s 3D Secure Chip Authentication Program (CAP). Optionally, a touch-sensitive keypad with twelve keys permits access to advanced functionality such as electronic signature and authentication modes, as well as to enhanced security features such as challenge-response applications and PIN code card protection.

Historically, banking institutions who protected access to their services with a One-Time Password required the use of a separate cumbersome token.

“Cards were born from cardboard, they’ve been ‘mag striped’ and ‘chipped’ and now we enter their silicon age, with an LCD display and touchpad opening up a multitude of possibilities. With NagraID’s recent achievements to demonstrate compliance to industry standards, the stage has well and truly been set to deliver the next generation consumer’s card proposition” says Eric Tomlinson, MasterCard Europe.

“This display card is designed to provide a very high level of security and reliability as well as ease of use. Users simply press a button to generate an OTP for secure access to their online services,” commented Philippe Guillaud, Executive Vice President and CTO of NagraID Security. He also added “The programmable nature of this platform makes it future proof and one can expect to see even more exciting and fantastic functionality in the near future.”

MasterCard directed promotional initiatives and large scale roll-outs will ensure that market price expectations are achieved. “As the world evolves towards increasing online and cashless transactions, the timing of our partnership with MasterCard is ideal, as it enables the growing security expectations of a rapidly expanding base of digital technology users to be quickly addressed via a secure, reliable and unified solution in a familiar and convenient form-factor.” said Cyril Lalo, President and CEO of NagraID Security.

Six Smart Credit Card Strategies

By Gerri Detweiler for Credit.com

While credit cards are sometimes portrayed as a necessary evil, they also provide a lot of benefits. The key is to know how to use them to your advantage and not to get caught up in the traps that lurk behind the benefits.

Here are six ways to use credit cards to your advantage:

1.  Borrow Cheaply

Interest rates are creeping up on all types of loans, but those introductory low-rate credit offers just keep coming. My mailbox is flooded with offers like these:

0% for six months! 

3.99% for the life of the transferred balance! 

0% financing for one full year with a major home improvement purchase!

Some consumers successfully use these low-rate offers to consolidate debt, pay college tuition, or even to pay off more expensive home equity lines of credit.

Of course, you have to watch out for the traps, which include fees of as much as 4% on a balance transfer, and rates that skyrocket if you make a payment even one hour late. Also keep in mind that maxing out a credit card can lower your credit score, resulting in higher rates on other credit card balances you carry. So tread carefully, but take a lower rate when you can.

2.  Play the Float

Banks and insurance companies play the float all the time, investing the money you pay for premiums or park in a savings account at 0% interest. If you can put your money to better use elsewhere (a high yield savings account would be one option), you will come out ahead.

You can do that by playing the float yourself, and a credit card is the perfect way to do it. Charge a high-ticket item on your credit card and pay it in full when the bill is due. Time it right and you could get nearly two month’s interest free. Find out when your credit card issuer’s billing cycle closes (call customer service or check your previous statements) and then make your purchase right after that date. The charge won’t appear until next month’s bill, and depending upon the length of the grace period, you might luck out with a good healthy float.

This strategy does not typically work if you are carrying a balance on your credit card. Virtually all credit cards use the average daily balance method including new purchases to calculate interest. That means you don’t get a free ride on new purchases if you start the billing period with a balance. The exception is One by American Express, which gives you the choice to pay off a purchase or revolve it. It also features a savings rebate deposited into a high-yield savings account.

Another way to play the float is to take advantage of interest-free financing. Let’s say you buy a $3,000 flat screen television with 0% financing. If you park that $3K in your high-yield savings account at 4.5%, you’ll have $135 at the end of the year. Watch those monthly payment and final payment due dates carefully, though. If you slip up, you will get hit with a hefty finance charge – probably all the way back to day one.

3.  Rack Up Rewards

If you want travel rewards, free movie passes, or even cold hard cash, just pull out the plastic. There are rewards to suit just about every interest. The challenge becomes picking one! If you carry a balance, understand that the interest rate may be higher than what you can get elsewhere. And watch out for strings attached to the rewards, such as minimum purchase requirements, blackout dates for travel, or caps on the amount you can earn.

Once you’ve found a card you like, you may find yourself using it for all your purchases. That can be rewarding – and addictive -- so make sure you don’t overspend just to earn rewards.

4. Shop Safely

Credit card purchases are backed with the protection of federal law. Under the federal Fair Credit Billing Act, you have the right to dispute a charge if you make the purchase using a credit card and the merchandise you order is not delivered, or if it is not delivered as agreed (wrong color, wrong item, for example) or even if it was not delivered as promised (the flowers guaranteed for delivery on Valentine’s Day show up two days later).

To dispute a billing error on your credit card, you must follow the rules, though. Picking up the phone to complain is not enough! Here’s what to do:

• Write to the credit card issuer at the address for "billing inquiries," not the address for sending your payments (the address for billing inquiries is often found on the back of your most recent monthly statement); include your name, address, account number, and a description of the billing error.
• Send your letter so that it reaches the credit card issuer within 60 days after the first bill containing the error was mailed to you.
• Send your letter by certified mail, return receipt requested, so you have proof of what the credit card issuer received. Include copies (not originals) of sales slips or other documents that support your position. Keep a copy of your dispute letter.

When you do, the credit card issuer must acknowledge your complaint in writing within 30 days after receiving it, unless the problem has already been resolved. And the credit card issuer must resolve the dispute within two billing cycles (but not more than 90 days) after receiving your letter.

Here’s the best part: While the item is officially under dispute, you can withhold payment on it. But you must pay any amount not under dispute and/or pay your regular minimum payment. The credit card issuer cannot take any legal or other action to collect the disputed amount and the related charges (including finance charges) during the dispute.

Debit cards do not carry the same protections, though your debit card issuer may offer assistance in a matter you cannot resolve with a merchant. One more warning: billing error protections don’t offer help in the case of buyer’s remorse.

In addition to billing disputes, you also have the protection of federal law if your credit card is lost or stolen and used by a thief. Your maximum liability for unauthorized charges is $50, and most card companies won’t even require you pay that amount. Technically there is no time limit for disputing unauthorized charges, but the sooner you do so, the easier it will be to resolve the matter.

Unauthorized use, by the way, doesn’t typically cover an unauthorized purchase by someone you lent the card to. When I was in high school, my mom once lent me her card to buy a dress, and I walked out with a dress, plus shoes, earrings and a purse – and a bill for $350. Unfortunately for Mom, she couldn't dispute the charge. Caveat emptor.

5.  Build Your Empire

Spike Lee is just one of many people who have followed his dreams and started his own businesses using credit cards. Plastic is usually a lot easier to get than a bank loan, especially for a start-up venture. But that easy credit has its downside. With a large line of credit on your Visa or MasterCard, you may be tempted to spend money on things not essential to your business. (Do you really need four-color letterhead and the latest computer?) If finances charges rack up faster than revenues, you’ll soon be in trouble.

The better strategy is to start your business on the cheap, and use credit cards only as needed. When you do use plastic, choose a business credit card reported in the name of your business rather than on your personal credit. You’ll protect your credit rating from the additional debt and you will be setting up your venture as a serious entity rather than a side hobby.

6.  Save at the Car Rental Counter

Your $10 a day car rental can easily mushroom into $30 a day if you buy the “protection” coverage the rental car company will try to sell you at the counter. The “Collision Damage Waiver” is technically not insurance, but it works like insurance in that it covers you if the vehicle you rent is damaged.

The good news is that between your own car rental coverage and a CDW waiver benefit on your credit card, you may be able to turn down that pricey policy. Check with your own auto insurance company first to see whether your coverage extends to rental cars and what the gaps may be. Then check with your credit cards to find out which ones offer free CDW coverage. Many will, and while that coverage is secondary to any insurance you have, it will likely pick up deductibles that aren’t covered by your auto insurance. You must use the card that offers the coverage when you rent the car, so make sure you carry that card with you when you travel.

Got a smart credit card strategy you would like to share? Send your tips and questions to tidbits@credit.com

Smart credit cards arrive in U.S

Credit cards featuring smartcard technology have been standard fare around the world for several years now -- but not in the U.S., where financial institutions have continued using cards based on less-secure magnetic stripe technology.

That may finally be about to change. Last week, the United Nations Federal Credit Union (UNFCU) became the first financial institution in the U.S. to unveil plans to issue credit cards that comply with the Europay MasterCard Visa (EMV) smartcard standard. The credit union's new Platinum Visa EMV cards will be issued to about 5,000 of its most high-value customers and can be used anywhere EMV cards are accepted

Cards based on the EMV standard use an embedded microprocessor instead of a magnetic stripe to store cardholder data and all of the other information needed to use the card for a transaction. Many financial institutions that issue EMV Chip cards also require cardholders to enter a Personal Identification Number (PIN) as an added security measure when using the card.

Chip-and-PIN credit cards are considered to be significantly safer than cards with magnetic stripes, which has led to the widespread adoption of EMV smartcards across Europe and in several other countries. EMVCo, an organization run by MasterCard, Visa, American Express and others to administer the EMV standard, estimates that close to a billion EMV cards were in use worldwide in 2009.

Financial institutions in the U.S., however, have resisted using the technology because of the expected costs of integrating it into the payment system. To accept Chip-and-PIN technologies, merchants will be required to either upgrade or replace all of their existing payment terminals. Banks, too, could end up spending significant money to roll out the cards to customers.

But that reluctance to adopt the technology is being felt by U.S. travelers abroad, said Merrill Halpern, card services manager at UNFCU. U.S. card holders are finding it harder to use their magnetic stripe cards in countries that have standardized on EMV technology. That's especially true in situations involving unmanned payment terminals such as ticket kiosks at railway stations or payment stations at parking garages.

"The U.S. is definitely behind in this area," he said. "It lags the rest of the world."

Boston-based Aite Group LLC last year conducted an online survey of more than 1,000 U.S residents who traveled outside of Canada, the Caribbean and Mexico. The survey found that, on average, U.S. cardholders had about a 50-50 chance of experiencing some sort of problem using their card in Western Europe. Aite Group estimated that nearly 10 million U.S. cardholders had such problems while abroad in 2008 resulting in nearly $4 billion in lost transactions for the U.S. card industry.

"The promise of ubiquitous card payments acceptance falls apart once U.S. cardholders cross their national border," the survey said.

UNFCU's rollout of EMV smartcards was driven by a desire to address such issues, Halpern said. "It definitely was a need that was expressed to us by our members...," Halpern said. "Many of our members felt disadvantaged when traveling abroad by not having a card that could readily be accepted."

The credit union's new cards will work on standard payment terminals in the U.S. as well because they also support magnetic-stripe technology, Halpern said.

In a research note, Gartner analyst Avivah Litan noted that convenience more than security is likely going to drive adoption of EMV smartcards in the U.S. But security should not be overlooked, she said, and companies such as Visa and MasterCard should consider easing some of their security requirements for U.S. merchants willing to make their payment systems EMV-ready.

Visa has reduced the scope of its security audits in cases where organizations have implemented EMV technologies, and the same could be done in the U.S, Litan wrote.

UNFCU s EMV smart cards will be manufactured by Gemalto NV, an Amsterdam-based vendor of smartcard technologies with U.S headquarters in Washington. The cards will be manufactured at a Gemalto facility in Philadelphia, where the company will also program all of the card holder s data onto the embedded smart chips.

Gemalto also provided all of the associated consulting services and was key to garnering Visa s support for the effort, said Ray Wizbowski, director of marketing strategy for Gemalto.

While the UNFCU-deal marks a breakthrough, Wizbowski said, "We are staring to see a lot more interest from major [credit card] issuers as well."

Much of the growth in interest in supporting EMV stems from the fact that magnetic strip technology is fast become obsolete and increasingly hard to use outside the U.S., he said.

A handful of major retailers have also begun exploring the possibility of replacing their PoS terminals with EMV-compliant terminals if only to bring them in line with their systems in other countries, he said. This trend could also push adoption of EMV smartcards in the U.S, Wizbowksi said.

Smart Cards

The "smart" credit card is an innovative application that involves all aspects of cryptography (secret codes), not just the authentication we described in the last section. A smart card has a microprocessorbuilt into the card itself. Cryptography is essential to the functioning of these cards in several ways:

• The user must corroborate his identity to the card each time a transaction is made, in much the same way that a PIN is used with an ATM.
• The card and the card reader execute a sequence of encrypted sign/countersign-like exchanges to verify that each is dealing with a legitimate counterpart.
• Once this has been established, the transaction itself is carried out in encrypted form to prevent anyone, including the cardholder or the merchant whose card reader is involved, from "eavesdropping" on the exchange and later impersonating either party to defraud the system.

This elaborate protocol is conducted in such a way that it is invisible to the user, except for the necessity of entering a PIN to begin the transaction.

Smart cards first saw general use in France in 1984. They are now hot commodities that are expected to replace the simple plastic cards most of us use now. Visa and MasterCard are leading the way in the United States with their smart card technologies.

The chips in these cards are capable of many kinds of transactions. For example, you could make purchases from your credit account, debit account or from a stored account value that's reloadable. Theenhanced memory and processing capacity of the smart card is many times that of traditional magnetic-stripe cards and can accommodate several different applications on a single card. It can also hold identification information, keep track of your participation in an affinity (loyalty) program or provide access to your office. This means no more shuffling through cards in your wallet to find the right one -- the smart card will be the only one you need!

Experts say that internationally accepted smart cards will be increasingly available over the next several years. Many parts of the world already use them, but their reach is limited. The smart card will eventually be available to anyone who wants one, but for now, it's available mostly to those participating in special programs.

For more information on one particular type of smart card, check out How Blink Technology Works.