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First Niagara rolling out chip-and-PIN cards

First Niagara Financial Group is starting to issue credit and debit cards with chip-and-personal identification number technology, as a fraud-fighting tool.

“This significant investment in chip-and-PIN technology affirms our commitment to improving security and peace of mind for our customers and the retailers with whom they conduct business,” said Justin Bigham, First Niagara’s head of consumer product management, in a statement. “We believe this positions First Niagara among the leaders in the banking industry when it comes to card security and fraud prevention.”

Buffalo-based First Niagara said it will begin the rollout this month and expects to convert a majority of its card portfolio in early 2016. The bank said customers can continue to use their existing cards until they receive and activate the new cards, which will be mailed to them. First Niagara said customers who are scheduled to be issued the cards will be notified ahead of receiving them.

The new cards will still have traditional magnetic stripes, so that customers can use them with retailers and other merchants who have not yet upgraded their technology.

All credit card customers, regardless of their provider, soon will be receiving new chip cards, although very few are going the extra step to include PIN security. The industry is moving to the more secure technology after so many credit card numbers have been stolen by hackers.

Adding haste to the switch: beginning Thursday, the responsibility for fraud begins to shift.

The financial institutions that issued the payment cards have been responsible for losses due to fraud. Starting in October, the party responsible for reimbursing losses will depend on who is using the more advanced technology. If a merchant can accept a chip card payment, but a consumer only has a magnetic stripe card because their bank hasn’t sent them a new chip card, the bank will be responsible for fraud losses. If a bank has issued a chip card, but the merchant hasn’t upgraded its card readers to accept chip cards, the merchant will now be responsible for fraud losses.

Consumers won’t be responsible for losses caused by fraud.

email: mglynn@buffnews.com