EMV–which stands for Europay, MasterCard and Visa—is now the global standard credit card chip. In wake of numerous large-scale data breaches and increasing rates of counterfeit credit cards, U.S. card issuers have adopted this new technology to protect customers. Approximately 120 million Americans have already received an EMV credit card and the numbers will continue to grow. So, what is an EMV card? Here are eight frequently asked questions found on creditcards.com to help you understand the changes.
1. Why are EMV cards more secure than traditional cards?
The magnetic stripes on traditional credit and debit cards store unchanging data. Whoever gains access to that data obtains the sensitive card and cardholder information. Unlike magnetic-stripe cards, every time an EMV car is used for payment, the card chip creates a unique transaction code that cannot be used again. If a hacker were to steal point of sale information the hacker would be unable to duplicate the transaction since the transaction number has already been used.
2. How do I use an EMV card to make a purchase?
Similar to magnetic-strip cards, EMV cards are processed for payment in two steps: card reading and transaction verification. EMV cards are read by scanners in different ways, instead of swiping the card, users are now going to “card dip.” Meaning, you insert the card into a terminal slot and wait for it to process. When the card is dipped data flows between the card chip and the financial institution your card belongs to. This process takes a few moments longer then the magnetic swipe.
3. Is card dipping the only option?
No, EMV cards support contactless card reading, also known as near field communication. Instead of dipping or swiping, NFC-equipped cards can be tapped against a terminal scanner that picks up the card data embedded on the computer chip. Dual-interface cards and the equipment needed to scan are expensive. There are plans in the future to address those factors but for now, credit card companies are looking to integrate EMV cards.
4. Will I still have to sign or enter a PIN for my transactions?
Yes and no, you will have to do a verification method, but it depends on which method is tied to your EMV card.
5. If fraud occurs after EMV cards are issued, who is liable for the costs?
If an in-store transaction is conducted using a counterfeit, stolen, or compromised card, consumer losses from that transaction most commonly fall on the payment processor or issuing bank. As of October 1, 2015 the liability for card-present fraud will shift to whichever party is the least EMV-compliant in the transaction. For example if a fraudulent card is used at your store and because your system is not up-to date with chip technology and the transaction goes through the cost of the fraud would fall on your store.
6. s the transition to EMV technology complete?
No, the deadline of October 1st was there to encourage stores to become EMV compliant, however it is going to be rolled out at a much slower pace. The percentage of EMV debit cards expected to reach consumers is 73% by the end of 2016 and 96% by the end of 2017. Larger banks like Bank of America or Chase are having an easier time rolling out EMV cards. Smaller banks will be converting their cards at a much slower rate.
7. Will a chip-card work at a retailer that does not support EMV technology?
The first round of EMV cards are equipped with both chip and magnetic strip functions, so consumers can adjust to the payment option that the retailer supplies.
8. Does an EMV card work outside the U.S.?
Many European countries have already transitioned to EMV technology due to high fraud rates. This does not mean that every country uses the EMV system, many countries like the U.S. still rely on the magnetic-stripe cards.