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US stores are expected to accept chip-enabled credit cards today, but most aren't ready

It's going to be a while before chip cards are universal

Matt Cardy/Getty Images

Today is the day that every merchant in the US is expected to have new terminals installed that can accept chip-enabled cards, the secure credit card technology that is ubiquitous in Europe and Canada and has been proliferating throughout the US for the last year. But don't expect to see any dramatic changes today, as both merchants and banks are still lagging in chip and PIN adoption.

While the US is the last major market using the signature system for credit card authentication, the 10-year-old chip-and-PIN system still hasn't caught on thanks to comparatively robust fraud protection systems in the States. Back in 2012, Visa and MasterCard instituted a liability shift that would move fraud responsibility to merchants who haven't switched to chip-and-PIN-compatible terminals by October 1st, 2015.

While this would seem to be incentive enough for merchants to get on board with chip cards, it hasn't worked as well as expected. Major retailers like Wal-Mart and Target are ready for the transition, but according to a study conducted by Randstad Technologies, only 58 percent of merchants would be able to meet today's deadline.

42 percent of merchants still haven't installed chip-and-PIN terminals

Banks aren't helping the transition much either. While most US banks have started issuing new chip-and-PIN debit cards, they've also been sending out chip-and-signature credit cards, which is a much less secure solution. "Signature is worthless as a form of authentication," Wal-Mart assistant treasurer and senior vice president Mike Cook said earlier this year at the Electronic Transaction Association's Transact conference. "If you look at the Target and Home Depot breaches ... not a single PIN debit card needed to be reissued in those breaches. The card number was worthless to the individual thief and fraudsters, because they didn't know the PIN." While chip and signature will cut down on card counterfeiting, it doesn't do much to help fraud.

It's likely we won't see complete adoption of chip-ready terminals until merchants start having to take on the cost of credit card fraud. Until then, if you're looking for a more secure credit card payment method, your best bet is still — and likely for the foreseeable future — mobile payment solutions like Apple Pay, Android Pay, or Samsung Pay, which will keep your credit card information secure wherever they are accepted.