SACRAMENTO — Credit cards embedded with microchips, which have dramatically reduced fraud around the world, are on their way to U.S. consumers, financial experts told California lawmakers on Tuesday.

But they cautioned the transition will be slow and costly, and it will not be a cure-all to problems such as the massive security breaches that occurred at Target and Neiman Marcus stores last fall.

Representatives of the credit card, banking and retail industries, joined by consumer advocates, testified at a joint hearing of two Assembly Committees examining the safety of consumer financial data.

Kimberly Lawrence, senior vice president for global initiatives for Visa, said microchip-embedded cards that use EMV technology are “the only effective tool in mitigating card-present fraud” and that the technology’s most secure feature has never been compromised. She cautioned, however, that conversion to an EMV system should not be seen as a silver bullet because such cards are still susceptible to fraud for online transactions.

Visa has announced that effective Oct. 1, 2015, liability for fraud involving the use of counterfeit credit cards will shift from the card-issuing bank to the accepting merchant’s bank if the fraud could have been prevented by EMV technology.

Even with that incentive, analysts expect only about 60 percent of merchants to have made the transition by then. Total cost to merchants, banks and credit card companies to make the transition in the United States are estimated at about $8 billion.

The microchips allow the cards to use a dynamic system, creating unique verification codes for each transaction. The magnetic-stripe cards used in the United States contain only static information, including the account number and the cardholder’s identity and personal information.

The technology makes it virtually impossible for a thief who has acquired a consumer’s personal information to create a counterfeit card, she said.

The microchip cards were developed overseas because other countries lacked the telecommunications infrastructure that enables instantaneous verification of magnetic-stripe cards.

Members of the Assembly Judiciary and Banking and Finance committees, retailers and consumer advocates applauded the coming change, but many argued that other steps are necessary to reduce risks to consumers.

Wearing a T-shirt emblazoned with a bull’s eye and the word “privacy,” Consumer Watchdog President Jamie Court argued that the most effective step lawmakers could take would be to put a price on consumer privacy by allowing lawsuits against merchants that negligently allow information to be stolen.

“There is no value to our privacy under the law,” Court said, asserting that companies will begin to take the issue seriously only if there are potential financial consequences.

He noted that California law does allow for financial penalties of $1,000 when private medical information is breached.

“Consumers need a hammer,” Court told lawmakers. “Create a private right of action.”

Judiciary Committee Chairman Bob Wieckowski, D-Fremont, noted that repeated attempts were made to have representatives of Target and Neiman Marcus testify at the hearings, but the committees’ invitations were declined.

Bill Dombrowski, president of the California Retailers Association, testified on behalf of the industry.

He said retailers have suffered 10 times the losses of banks and 20 times the losses of consumers as a result of credit-card fraud. Dombrowski argued for stiffer criminal penalties against perpetrators. “We need to recognize this is a determined battle against criminals,” he said.

Although he did not specifically mention the legislation, Dombrowski used the opportunity to argue against a bill by Sen. Hannah-Beth Jackson, D-Santa Barbara, that seeks to restrict how long online retailers can retain information obtained from consumers to more securely complete online transactions.

“It makes no sense for the Legislature to restrict the information we can collect,” he said.

Dombrowski noted that many merchants believe the most secure solution to information breaches and credit-card fraud is to aggressively moved toward transactions completed using a smartphone.

Because smartphones have powerful computing capabilities, they can generate bar codes that allow for payment from a mobile wallet system — a process that shields the consumer’s underlying payment information from the retailer’s payment system.

“Mobile-device payment solutions may be the answer,” Dombrowski testified.