In response to this continuing issue, some of the leading card providers have worked together to develop a new global standard in card security — microchip technology.

From 2010 cardholders can look forward to smarter and safer transactions with their Visa cards.

Many financial institutions are in the process of upgrading all cards to the new chip card technology, so look out for your new Visa chip card in the mail from the time of renewal.

The microchip is a smart chip, which appears as a gold or silver square embedded on the left-hand side on the front of the cards.

Like the magnetic stripe on the back of current Visa cards, the embedded chip stores your account details — your account name, number and account expiry date.

But unlike the magnetic stripe, the microchip is virtually impossible to copy, which provides an unrivalled level of protection against counterfeiting, card skimming and other fraudulent use.

Chip technology is already in use in Europe, Asia and New Zealand and has quickly become the preferred way to transact for cardholders and merchants alike.

New chip terminals will soon be in use across Australia so lookout for the chip wherever Visa is accepted.

With this new technology, instead of swiping your card, you may soon be asked to insert your card in the new EFTPOS terminals. The card remains in the terminal throughout the transaction and confirms your identity and also transaction authorisation by requesting your PIN.

The new method is often referred to as "chip and dip" as you dip your chip card into the EFTPOS machine for reading.

This is the new global standard. During the upgrade transition period, you will still be able to swipe and sign for transactions as you did before.

As merchant terminals are upgraded, however, 'dipping the chip' and entering a PIN will become the new easier, faster and safer way to make transactions.

If you are travelling overseas, we suggest you memorise your PIN as this is now the preferred payment authorisation method for most merchants.

*Sara Morrison is the client services manager at South West Credit.