EMV Chip Card Fact #1: “EMV” stands for Europay, MasterCard® and Visa®.
Europay, Mastercard®, and Visa® are the three companies who introduced the chip payment technology. You may hear the new cards called by many different names, though. “EMV,” “chip-enabled,” “chip-based,” “chip and PIN,” and “chip and signature” all refer to the type of credit and debit cards that are being rolled out in the U.S. The new cards will replace old cards that exclusively use a magnetic stripe on the back to hold account data.
EMV Chip Card Fact #2: They’re more secure.
The magnetic-stripe cards that have been used in the U.S. contain “static” information about the cardholder’s account. Basically, they provide all the information that’s needed to process a transaction. That information can be copied easily by criminals with the right equipment and used to create bogus cards for the underlying account.
EMV chip cards are harder to hack because the chip enables a dynamic exchange of information between the chip in the card and the card issuer’s system. Some account details are embedded in the chip, but a unique code must be generated before each transaction can be completed. Once generated, the code can’t be used again.
EMV Chip Card Fact #3: “Swiping” will eventually become a thing of the past.
You know the drill. To pay for a purchase now, chances are you’re still swiping your card through the card reading machine. EMV chip card readers use a different kind of equipment. Instead of swiping, EMV chip cards require a process called card dipping.
The process is quick, but not quite as quick as the swipe method. Don’t let go of your swiping skills just yet, though. It may take some merchants longer than others to convert their card reading equipment. Newly issued EMV chip cards will work both ways – with the chip and the magnetic stripe.
EMV Chip Card Fact #4: You probably already have one in your wallet.
In anticipation of the shift, some banks and card issuers have begun issuing EMV cards for new accounts and (in some cases) existing accounts as well. It’s pretty easy to tell whether you have one or not; the chip is typically visible on the front of an EMV card.
As mentioned in Fact #3 above, even if your card has a chip it may also have the magnetic stripe as well. Many card issuers are leaving the stripe on their newly issued EMV chip cards so they will work both ways during the transition.
EMV Chip Card Fact #5: They can make overseas travel easier.
It’s still possible to pay with a magnetic stripe card if you’re traveling in another country – but it may not always be convenient. At self-serve kiosks in particular, without an EMV chip card, you could find yourself without a way to pay – or at the very least have to hunt down a real live person who can help you complete your transaction.
EMV Chip Card Fact #6: Authentication may differ.
Whether you’re required to use a Personal Identification Number (PIN) or a signature to complete a transaction will depend on the issuer – not on whether you’re using a debit or credit card. This was the required authentication process for the old magnetic stripe type of cards.
With EMV chip cards, you’ll be required to do either one or the other for all transactions you make on your card. The credit card issuer determines which type of authentication will be required.
EMV Chip Card Fact #7: Uh oh… Online fraud may get worse.
EMV chip cards are expected to put a damper on thieves’ ability to steal account data and create counterfeit cards, but security experts predict that online fraud will increase.
Thieves who previously relied on easy-to-get info from magstripe cards to make counterfeits may shift their focus to an area that’s easier to exploit. Since online purchases can be made with stolen account information and without passing a card through a reader, buying stuff online may be the next big area of opportunity for fraudsters.
How to Use your new Chip Card at a Retail Checkout
As U.S. merchants begin transitioning to chip card readers, consumers will notice the payment process works a little differently. Not all devices will look the same, but the steps are nearly identical. Here’s how it works:
1. Rather than swiping your credit card, you will insert it into the front of the card reader with the chip facing up.
2. Keep it in the card reader, and follow the prompts on the screen until your transaction is complete.
3. Remove the card. If a signature is required, just sign the receipt and you are done.
Your chip enabled card also has a magnetic stripe that will continue to work at merchants that do not have a chip reading terminal.