How does this work online? Or over the phone?
I use PayPal, but almost on a daily basis, I get spam mail with a very realist looking PayPay format telling me my account will be limited or closed if I don’t update my info.
Online and by phone, these new cards work the same way as the old.
The new cards were designed mainly to prevent the bad guys from copying your card data from the magnetic stripe. The bad guys would then make a copy of the card, which can be used at gas-pump credit-card terminals and other places where a clerk doesn't verify the true owner of the card.
So these new cards will deter fraud from physical card copying, but it looks like they still keep us vulnerable via fraudulent online and phone transactions.
We process credit cards on-line for patients to pay doctor’s co-pay, balance and fee for service. The information is keyed in on a computer terminal based on written authorization from the patient, so the docs don’t have to pay for upgraded equipment or have any liability. Approval/ denial from the carrier is instantaneous. Works much better for them. Of course the docs all know their patients so that is a benefit and the incidence of someone using a fraudulent card is almost nil versus a retail establishment where the fraud problem is rampant.
Eventually you will be required to have a chipped card reader at your home. If you don’t you’ll be checking some EULA box that informs you all purchases with the credit card your about to use from that date forward are your responsibility to pay whether its a fraudulent purchase or not. Otherwise they won’t do the order. They’re cheap, BTW.
http://www.identiveusa.com/smart-card-readers/usb-smart-card-reader-scr3310-v2.htm