The new microchip technology in credit cards may make them safer, but consumers are not impressed.
The idea was putting microchips into credit cards would make it more difficult to steal the personal information embedded in the chip and make shopping safer.
The idea worked, at least perceptually. In general, consumers feel their personal information is safer with the chips replacing the electronic stripe on the back of the cards.
But for most retailers, a transaction using a card with a chip takes about five seconds longer than a transaction with a stripe that requires only a card swipe. And Millennials hate anything that takes longer.
First, the numbers. A Spectrem survey of more than 1,000 affluent investors found that 84 percent have received their new credit cards with a microchip embedded in the card, and 75 percent of those investors feel their information is safer as a result of the new technology.
But the change in card technology has produced a change in how credit cards are being used, especially by young adults. Millennials are using mobile payments even more as the credit card process using a chip takes longer than the swipe.
“the process can take as long as four or five seconds (longer) so it is really slowing the transaction down,’’ said Chris Britt, CEO of the mobile bank account and rewards app Chime in an interview with Yahoo! Finance.
Several studies show that Millennials are forgoing credit cards for fear of building on their debt, preferring to use debit cards or prepaid cards as well as mobile payment systems.
According to the Spectrem survey, the microchips are not going to have much of an effect on shopping habits. Ninety-four percent of investors said they will continue to purchase items as normal with the new cards. Only 2 percent said they will make more purchases online as a result of continued hacking issues, and 4 percent say they are still leery of using their credit card online and will only shop in the stores in person.
Kent McDill is a staff writer for Millionaire Corner. McDill spent 30 years as a sports writer, working for United Press International and the Daily Herald of Arlington Heights, Ill. From 1988-1999, he covered the Chicago Bulls for the Daily Herald, traveling with them every day through the nine-month season. He also covered the Bulls for UPI from 1985-88, and currently covers the team for www.nba.com. He has written two books on the Bulls, including the new title “100 Things Bulls Fans Should Know And Do Before They Die’, published by Triumph Books. In August 2013, his new book “100 Things Bears Fans Should Know And Do Before They Die” gets published.
In 2008, he resigned from the Herald and became a freelance writer. The Herald hired him to write business features and speeches for the Daily Herald Business Conferences and Awards presentations.
McDill also writes a monthly parenting column for the Herald’s Suburban Parent magazine.
McDill is the father of four children, and an active fan of soccer, Jimmy Buffett and all things Disney.