What’s with The Chip On My Credit/Debit Card
If you have a debit or credit card, you might have received a new card in the mail that has a small chip in it. The EMV or “smart” cards are now becoming the standard. But what does this chip do and why is it there?
What does EMV stand for?
EMV stands for Europay, MasterCard®, Visa®. It is the global standard for chip-based Debit and Credit Card transactions. It is a joint effort between Europay, MasterCard® and Visa® to ensure security and global acceptance so that MasterCard® and Visa® Cards can continue to be used everywhere.
What is an EMV or chip card?
An EMV card is a standard-size credit or debit card that has a microchip embedded on the front of the card in addition to the traditional magnetic strip on the back. Also known as a smart card or chip card, an EMV card functions similarly to a traditional magnetic strip card, but can be more secure.
How do EMV cards work?
When an EMV card is used to make a purchase, the microchip in the card generates a unique code that's needed for the transaction to process. Each code is used only once – for each new transaction, a new code will be generated, thus adding an extra layer of security for the cardholder. This extra layer of security is not available when the card is swiped and payments are completed using the traditional magnetic strip. What's the benefit of using an EMV card?
Because each code generated during a transaction is unique, EMV cards protect against fraud better than traditional magnetic strip cards. While chip technology provides an extra layer of security, it won't eliminate fraud and data breaches entirely. It will, however, catch the U.S. up to other countries, as chip card technology has been around for more than 20 years and is used in over 130 countries around the world.
Even with the added security of EMV cards, it's important to exercise caution when making purchases online, over-the-phone and at card terminals that are not EMV chip-enabled. In these instances, the layer of security afforded by the chip is not available and the transaction is no more secure than a transaction conducted with a traditional magnetic strip card.
How do you use an EMV card?
To use an EMV card, insert the card into a chip-enabled terminal and follow the instructions on screen. The card must be left in the terminal during the transaction and removed once the transaction is complete. If you swipe your card at a chip-enabled terminal, you will be prompted to insert your card into the terminal instead.
If a merchant does not yet accept or have the ability to process EMV card transactions, you can simply swipe your EMV card using its magnetic strip to complete the purchase. For the time being, online purchases will continue to be processed just as they are now.
Do I still have to sign or enter my PIN when I use my card?
Depending on the verification method of your EMV card, will determine if you have to do one or the other. The majority of your credit transactions will still require a signature. However, some card providers will be switching to PIN verification as an extra precaution but it will likely be 2-3 years until this switch is made.
In the United States, fraud has doubled in the past seven years. With the new EMV chips, the United States will hopefully see a decline in stolen information and credit card fraud. The EMV chip cards have proven to be successful in several European countries that have implemented this new technology. Even though using a chipped card might take a little getting used to and patience at the register, just remember that it is for your benefit and the protection of your sensitive information. It is better to wait an extra 10-15 seconds at the register than be at a higher risk of a criminal spending your hard earned money.
Robins Financial Credit Union Visa® Debit and Credit Cards now come with built-in chip technology. These new cards are not only more secure – they’re also easy to use.