You’ve probably seen commercials for new credit cards with small chips. Instead of swiping a magnetic strip credit card, the customer in the commercial would insert the chip into a terminal or flash the chip in front of a reader and enter a PIN number. But what are EMV cards, and why should we be using them?
#1: EMV Cards are Smarter
It might not look like much, but each one of those little gold chips on an EMV card contains an embedded microprocessor, a type of small computer that provides strong security features and other capabilities not possible with traditional magnetic stripe cards, according toEMVCo. When inserted into a terminal, the reader is able to exchange data with the card easier. With contactless EMV cards, the reader reads the chip and allows an exchange of data via radio frequency without the card ever leaving the customer’s hand. Research has shown that a contactless transaction can be approximately 53% faster than a traditional magnetic stripe credit card transaction, and 63% faster than using cash.
#2: EMV Cards are Safer
Remember those huge security breaches from Target and other companies earlier this year? They probably would not have happened if those big name retailers had switched to EMV systems faster. EMV cards are considered more secure because it’s harder to copy account numbers and security codes from chips than from magnetic strip cards. EMV cards also create a unique code for each transaction, making them more difficult to hack or counterfeit.
#3: EMV Cards are Becoming More Accessible in the United States
It’s taken long than data security professionals would have liked, but EMV cards are slowly becoming more accessible in the U.S. Most major credit card companies are now making credit cards with EMV chips, like the Chase with their Sapphire Preferred Card, along with American Express and Citi Bank, according to NerdWallet.
Photo via Chase
#4: EMV Cards are the International Standard
If you’re going on vacation in Asia or Europe, you better have a EMV credit card. EMV cards are the standard worldwide, to the point where some merchants no longer accept our magnetic striped cards. According to Businessweek, companies have been slow to embrace the more secure payment systems that have been widely used in Europe and Asia for years, mostly because of the expense and a lack of synchronization among retailers, credit card providers, and banks.
#5: By October 2015, Merchants That do not Take EMV Will be Held Liable for Counterfeit Fraud
According to Forbes, merchants and retailers have until October 2015 to upgrade to EMV systems. If they do not switch by that time, credit card networks will, “…hold that an issuer or merchant who does not support EMV will assume the liability for counterfeit card transactions. If a merchant has not adopted, at least, the contact chip terminals and a contact chip card is presented, liability for counterfeit fraud will shift to the merchant’s acquirer.” So if you’re a merchant, that means you would be held liable for any fraud that occurs to a customer’s EMV chip card.
So switching to a EMV credit card and terminal is a great idea for customers and merchants alike, especially by 2015. For information on EMV cards and how they work, check out this video from CreditCardsTV: https://www.youtube.com/watch?v=hz9HKNj1-m8.