The global semiconductor chip shortage has flooded into the banking sector, causing delays for new credit and debit cards.
Key Details
- Some credit and debit card issuers have reported longer wait times for chip-enabled cards due to a worldwide lack of semiconductor chips.
- Experts predict delays could continue through 2023, according to a report from the Washington Post.
- Major banking chains American Express, Chase, and Discover have not reported longer card wait times, but credit unions and regional banks are seeing significant delays, with some reporting waiting over six weeks for delivery.
Why it’s news
In 2020, many manufacturing plants shut down to avoid spreading COVID-19, leading to a shortage of semiconductors. In the three years since the factory shutdowns, the lack of semiconductors has affected computers, phones, cars, and now—credit and debit cards.
Over the last few years, credit cards have come equipped with a small chip inside that makes it easier to tap and pay for products but also offers better security and encryption than the typical magnet strip did.
Americans typically receive a new card in the mail a few days after requesting one, but as semiconductor chip numbers remain low, it is taking longer for consumers to receive their credit and debit cards.
It depends on the banking institution used to determine how long consumers will have to wait for their card, but some people have reported waiting up to six weeks, causing frustration after being without a card for that long.
Many experts are encouraging people to start utilizing a digital wallet to store their cards, license, and any other form of identification electronically.
Innovations like Apple Wallet and Apple Pay house debit and credit cards and, in some states, your personal IDs. Government agencies have consistently enforced the hard copy of most forms of identification, but they, too, are joining the virtual ties and slowly allowing things to be more virtual.
Nearly 90% of consumers are now using some form of digital payment in daily life, and 62% use more than one kind, according to a 2022 report from McKinsey & Company.
A virtual wallet is fast and convenient, allowing consumers to have everything they need in one place and still have access to their accounts if a card is lost or takes multiple weeks to be shipped.
Many consumers argue that a digital wallet is safer than physical cards because current smartphones are heavily encrypted, making it harder for someone to access the information and steal funds.
Others disagree, stating that having all of your information in one place is highly dangerous. If someone steals a phone, they can access the digital wallet and have all of the information readily available in the same place.
Another digital downside is that not all stores accept digital payment options, so having a physical payment option is still necessary. Many stores are beginning to accept digital wallets, but not all have adapted to the trend.
