What is EMV? 7 Facts About Chip and Pin Credit Cards

What is EMV Chip and Pin Credit Cards

You’ve probably noticed that credit and debit card technology is changing. Just a few years ago, all cards were swiped at the point of sale. The swipe allowed the terminal to read the magnetic strip on the back of your card and process the transaction, which you would confirm either by entering a PIN or signing a receipt.

Today, EMV payments have become the new standard. They protect your credit card information and can even be used with a PIN. You might have questions about how this technology works. So, what is EMV? How do the new chip and pin credit cards work? Here are seven things you should know.

#1: EMV Stands for Europay, MasterCard & Visa

Europay, MasterCard and Visa, also known as EMV, is the new global gold standard for credit card payments. It is used around the world to provide an extra layer of security for consumers and retailers as they use credit cards.

Countries that have implemented EMV technology have seen significant decreases in cases of credit card fraud.

#2: Chip Cards Use Dynamic Encryption

At the core of EMV technology is a system of dynamic encryption. You probably know that the word “encryption” means your data is encoded before it’s transmitted. That means a retailer won’t be storing your credit card number. Instead, they’ll be storing an encrypted code that represents your card information.

The “dynamic” part of the technology refers to an additional layer of protection. Each time you buy something with your chip card, it creates a unique code for that transaction. If there was a data breach, the code generated could not be used to buy anything because the card issuer would deny the charge.

#3: EMV Transactions May Take Longer Than Swipe Transactions

The implementation of EMV technology required retailers to invest in new card readers. Some retailers adopted the new technology immediately; others have been slow to get on board due to the expense of upgrading their equipment.

EMV transactions are more secure than swipe transactions, but they may be a little slower than what you’re used to. That’s because you’ll have to insert your card instead of swiping it and wait for the machine and card to communicate with one another. However, advances in technology will likely speed up the process before long.

#4: Some Chip and PIN Cards Are Contactless

Right now, most people who have chip and PIN cards have cards that must be inserted into a reader (some institutions refer to this as dipping the card) to make a purchase. However, not all cards are like that – and dipping may be replaced by contactless transactions.

A contactless transaction merely requires the card to be tapped or held near the reader. These transactions tend to be very quick. They use the same technology (near-field technology or NFC for short) as mobile wallets like Apple Pay.

The Essential Credit Card Fraud Prevention and Detection Guide

#5: You’ll Still Need to Enter a PIN or Sign a Receipt

EMV cards can be set up to require either a PIN or a signature for approval of the transaction. This isn’t a case of using a PIN for a debit card and a signature for a credit card. Chip and PIN credit cards may be set up using either option.

It may be that, in the future, technology will evolve so that a PIN or signature isn’t required. But right now, this requirement adds an extra layer of protection to your transactions.

#6: Not All Retailers Accept Chip and PIN Cards

Adopting new technology is often a slow process and that’s been the case with chip and PIN cards. As of 2018, many retailers can accept only chip and signature cards. For most consumers that’s not an issue, since chip and PIN cards are still less common than the alternative.

The good news is that you can still use a chip and PIN card even if a retailer hasn’t caught up to the technology. These cards always have an alternative option. If you present a chip and PIN card, it will default to a chip and signature option if that’s all that’s available.

#7: You Won’t Be Responsible for Data Breaches

While the chip and PIN technology is still in transition, you might wonder what happens if you need to swipe your card because a retailer hasn’t installed new machines.

As of this writing, the laws say that the entity who is less EMV-compliant will bear the financial responsibility for the breach. In other words, if your financial institution issues you a chip and PIN card and a retailer requires you to swipe your card, it’s the retailer’s responsibility if someone steals your information.

EMV technology is on its way to full implementation in the United States. These cards offer a much higher degree of protection that traditional cards – and that’s a good thing for consumers, retailers, and financial institutions.

To learn about CFE’s secure credit card options, please click here.

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Credit Cards