J.P Morgan Launches Chip Based Credit Cards

J.P Morgan Chase & Co. (NYSE:JPM) announced on Monday that it is set to launch its smart chip based credit cards. These cards are expected to gain popularity among Americans who travel abroad, where such cards are more commonly used.

J.P Morgan, the words largest lender, is rolling out credit cards that will be embedded with smart chips. These credit cards are released in order to reduce fraud.

The credit card, which is co branded by British Airways, will be available on Monday and is projected to appeal to frequent travelers who may experience problems overseas with U.S. based credit cards with magnetic strips. United States is the only developed country that is still primarily using magnetic strip credit and debit cards, whereas the rest of the world has already switched or is changing to high tech cards.

The New York based lender said that it will be offering Visa Inc. version of cards that stores account details on a computer chip, which are more difficult to hack, compared to the magnetic strip cards. The technology is known as EMV, which remains within card industry standards, has become standard outside U.S as lenders aim to minimize losses due to credit card frauds, however only recently this technology is catching up in the U.S markets.

The magnetic strip cards are so deep-rooted in the United States that the transition to high tech cards faces difficulties, partly also because merchants will have to upgrade their card registration systems in order to handle the fresh cards. Most of the U.S merchants and retailers have not done the upgrade because of costs.

However, U.S citizens who travel abroad face regular problems while using their magnetic cards with foreign merchants, who insist on using high tech cards. Also magnetic cards are not read by train ticket machines and other sales booths abroad.

Morgan is attempting to appeal frequent travelers to use chip based cards to avoid the risk of having their cards being declined by foreign merchants. Naney Pandit, general manager for card services at Morgan, said in a statement that clients can use the British Airways Card at chip enabled, point of sale machines, such as restaurants or gas station booths and even train ticket kiosk.

Bank of America Corp, Wells Fargo & Co, U.S Bancorp and other major lenders this year have made similar announcements geared toward frequent international travelers and corporate clients, joining hands with some credit unions already offering high tech cards to their members.

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Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.