Whether you realize it or not, a major change is happening in wallets throughout the U.S. Perhaps it’s already happened to your wallet. If it hasn’t, it soon will.
The magnetic stripe credit card you’re used to using to make purchases has been – or will soon be – replaced by what is called a chip card.
Actually, there are a bunch of names for it: chip card, smart card, smart chip card, chip and PIN credit card, chip credit card. And you’ll often hear the cards referred to as EMV chip cards, EMV smart cards, EMV cards.
EMV. It’s an acronym you should know. Named after its original developers — Europay, MasterCard, and VISA — EMVis a global standard for the cards equipped with computer chips and the technology used to authenticate chip card transactions.
You see, not only is a change happening for you as a consumer (where you’ll use a chip card instead of magnetic stripe card to make purchases), there are big changes ahead for you as a merchant too. All U.S. merchants are being urged to use EMV-compatible payment terminals in their business on or before Thursday, October 1, 2015.
Why the migration to EMV technology?
EMV chip technology is proven to significantly reduce card fraud resulting from counterfeit, lost and stolen cards.
Currently, when you use the magnetic stripe card, data is exposed. It’s decrypted and then encrypted several times through the transaction. Also, data from a magnetic stripe card does not change. It’s static.
Because the data from a magnetic stripe card doesn’t change, it can be skimmed easily which leads to fraudulent use and the production of counterfeit cards.
The chip card, on the other hand, is much more secure. Data passes through the same stops as the standard methods, but data is NEVER decrypted and therefore NEVER exposed.
On top of encryption, each EMV chip card transaction is also assigned a unique one-time-use token, which is then destroyed once the transaction is complete.
Change for Consumers, Change for Merchants
Changes to chip cards mean a new shopping experience as a consumer. No longer will you swipe your card. You’ll insert your card into an EMV-compatible terminal. The card must stay inside the terminal while the chip information is accessed and updated.
As a merchant, the switch to EMV means adding new EMV-compatible payment terminals—and—complying with new liability rules.
For everyone, it means greater protection against fraud.