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VOL. 129 | NO. 181 | Wednesday, September 17, 2014

First South Launches More Secure Cards

By Andy Meek

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First South Financial is preparing to roll out credit cards embedded with new chip technology that offer users more protection than the standard piece of plastic today.

Starting Oct. 1, the Memphis-based credit union will offer its Visa Platinum credit cards with new EMV chip technology. Cards with such technology, according to the Smart Card Alliance, contain embedded microprocessors that support “enhanced cardholder verification methods” and are regarded as more secure when making purchases online.

Cards that include EMV chips store encrypted payment information in a secure chip rather than on the magnetic stripe visible on existing cards. The personalization of EMV cards also is done using issuer-specific keys, and according to the Smart Card Alliance, it is virtually impossible to create a counterfeit EMV card that can be used to successfully conduct an EMV payment transaction.

First South Financial, a more than 50-year-old credit union with about $476 million in assets and 15 Memphis-area locations, will start issuing the new cards Oct. 1 as new accounts are signed up and as the expiration date draws near for existing cardholders. Delynn Byars, First South’s senior vice president of marketing, said the cards will still need to include a magnetic stripe for now, along with the EMV technology.

That’s because EMV-enabled cards can’t be used everywhere, since some retailers still don’t have the capability to interact with them just yet.

First South president and CEO Craig Esrael described the introduction and eventual prevalence of the cards as inevitable, since they’ve been used widely for a while already in Europe, Canada and Asia. Also driving their adoption is the fact that security of personal and other financial data remains a top concern for consumers and is consistent fodder for media scrutiny these days.

“In light of the latest data breach announcement, we feel like this is coming out just when Mid-Southerners can use it.”

–Craig Esrael
President and CEO, First South Financial

Last week, for example, Apple unveiled a new mobile payment system that ostensibly removes some of the safety concerns of swiping plastic at retail outlets. Through the new Apple Pay service, an iPhone stores credit card details and lets users pay by holding their phone close to a sensor.

First South says helping customers mitigate some of the risk of data getting hacked is motivating the EMV chip technology rollout. Home Depot confirmed just last week that its payment systems had been hacked, with the breach carrying the potential to be one of the largest ever, according to press accounts.

Home Depot acknowledged the hack potentially puts at risk millions of shoppers who used credit and debit cards at its more than 2,000 U.S. and Canadian stores. Other recent breaches have involved retailers such as Target and Neiman Marcus and the restaurant chain P.F. Chang’s.

“In light of the latest data breach announcement, we feel like this is coming out just when Mid-Southerners can use it,” Esrael said.

According to the Smart Card Alliance, big financial institutions like American Express, MasterCard and Visa have all laid out their roadmaps for moving to EMV technology in the U.S. Other banks, likewise, have started issuing cards with the technology to their customers.

Byars said if a First South customer wants to make the switch to the new cards before theirs are expired, the company can accommodate that.

“This adds an additional layer of protection, with the data stored on the chip,” she said. “Like other financial institutions, we’re very concerned about fraud, and this is really about protecting our members. We think this is a step in the right direction to cut down on fraud.”

PROPERTY SALES 74 74 17,458
MORTGAGES 93 93 20,128
BUILDING PERMITS 126 126 36,072
BANKRUPTCIES 63 63 11,227