20
Aug

Currently, a wide variety of emerging technologies are now being applied to the credit card world, and they may be of significant benefit to consumers going forward in several different ways.

Companies in a number of different industries are now trying to take advantage of new technology to make credit card purchases more secure and convenient for users, according to a report from the financial news site The Street. These are being targeted to consumers in several different demographics, and each may hold a unique value for those trying out the new programs.

EMV cards
Many consumers may have already heard about EMV, which is short for Europay, MasterCard and Visa, the companies that pioneered the payment method, the report said. The specific programs that use the new technology come with many different names, but the concept remains more or less the same: Instead of swiping their card in the traditional way to complete a purchase, they simply wave it over a special sensor, then enter a personal code to complete the transaction.

The EMV system works by embedding a microchip in the credit card itself, and for this reason, the technology is sometimes referred to as "chip-and-PIN" purchasing, the report said. Currently, these cards are being extended largely to wealthier consumers who travel overseas with regularity, because throughout most of the world, this technology has been adopted for years, and it may be difficult to even find businesses there that can accept U.S.-issued cards that still rely on magnetic strip technology.

The EMV technology is far more secure than magnetic strips, because of the way it encrypts and stores payment data, the report said. For this reason, even if the card is lost or stolen, it can be far more difficult to gain access to the account information it stores.

However, it's expected that EMV cards will become the norm in just the next few years, the report said. Already, Visa and MasterCard are mandating that card issuers and merchants make the switch, and both American Express and Bank of America have put plans for doing so into place.

Mobile wallets
The new wave of "mobile wallet" technology is somewhat similar to EMV cards, but relies on smartphones rather than credit cards. Using a specially designed smartphone application, users may be able to enter their credit or debit card data onto their phone and, as with EMV cards, wave their device and enter a code to complete a purchase. This technology relies on near-field communications devices both embedded in the phone and on the tap-and-pay reading device itself.

Users may find this more convenient because it will allow them to avoid carrying around a number of credit cards in their physical wallets, and also gives them the added protection of being perhaps less likely to expose their account data if the phone is lost or stolen. This is especially true if they protect their device with a password.

Another benefit of mobile wallets is that consumers may be able to link the accounts they store on them with other offers they find. That could include coupons for items they want to buy, store loyalty rewards programs, gift cards, and so on. All of that could be used automatically when the phone is tapped on the reader, helping them to avoid the time it takes to scan all these offers individually.

What might restrict adoption
Experts have long said that many consumers may not be able to gain access to these types of technology simply because they are not widely available, but that will almost certainly change in the next few years as it becomes less expensive to manufacture EMV cards and NFC-ready smartphones. However, some have also noted that many consumers may be concerned about the safety of these programs, and that only time and use will help to assuage these concerns. It's believed that once these technologies gain a foothold with the public, widespread adoption will likely follow relatively quickly.

Mobile wallets and EMV cards being more secure than traditional card use, however, won't fully protect consumers' finances. For this reason, it's also vitally important that you take the time to order copies of your credit report with regularity. This will help you to ensure that there are no unfair markings on these documents that may be having an adverse effect on your standing. If you notice any such entries on your report, you should contact a credit repair service to see if you can get it cleared from your profile, and return your credit standing to where it deserves to be.