If you’ve been looking into getting a new credit card lately, you may have heard the term EMV credit card and wondered what it meant. This new trend has been gaining popularity in the United States over the past few years, but it is already firmly established internationally. The following information can help you understand the basics of EMV credit cards and how they can benefit you.
EMV stands for Europay, MasterCard and Visa. They are sometimes known as chip-cards because a small metal square - the chip - is visible on the outside of the card. Although it is fairly new to the U.S., it is considered the global standard in security for credit cards around the world. The term refers both to the computer chip equipped credit cards and the technology that works with the cards to authenticate them. This advanced technology gives chip card transactions a higher level of security than traditional cards.
EMV cards have become more popular in the U.S. because of the highly public and damaging security breaches that have occurred in recent years. With hackers gaining access to credit card databases from businesses thought to be very secure, financial institutions and businesses knew that a change was necessary. Now, people using EMV chip cards have an added layer of security both in the U.S. and when traveling abroad.
The reason why EMV cards are considered more secure is because the information contained on the chip is only useful for a single payment. Each time an EMV card is used to make a purchase, a unique transaction code is created, and that code can’t be used again.
In order to keep up with the change to EMV cards, consumers will have to obtain these cards and learn the specific technique for using them. Businesses and financial institutions will also have to adjust by outfitting their facilities with new technology, including processing systems. They will also have to change policies to keep up with new liability regulations.
Fox Business spoke with several experts about this technology, including Julie Conroy, the research director at Aite Group.
“Experts hope it will help significantly reduce fraud in the U.S., which has doubled in the past seven years as criminals have shied away from countries that already have transitioned to EMV cards, Conroy says,” according to Fox Business.
The way that these cards are used is different from a magnetic strip card. It also takes longer for the data to be transmitted and the transaction to be authenticated.
"Instead of going to a register and swiping your card, you are going to do what is called 'card dipping' instead, which means inserting your card into a terminal slot and waiting for it to process," stated Conroy.
A second method of using an EMV card makes use of near field communication (NFC). Cards equipped with NFC technology just need to be tapped against a scanner, which can read the data. This is similar to the system that many people are familiar with using on public transportation in the country’s major cities.
"Contactless transactions are more consumer-friendly because you just have to tap," according to Martin Ferenczi, the president of EMV provider Oberthur Technologies. ”Around the world, there is a move to make EMV cards dual-interface, which means contact and contactless. However, in the U.S., most financial institutions are issuing contact cards.
"This is due to the fact that dual scanners are expensive, so businesses are waiting until EMV cards become more widespread.
Some cards are known as chip-and-PIN because they require a pin number to be entered, just like with a traditional debit card. There are also chip-and-signature cards, which will likely be more popular than the PIN variety in the coming years.
This new trend is a great thing for both consumers who want to keep their money safe and businesses that want to protect their customers and their reputation.
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Don't have a Cardinal Bank Visa CheckCard or Credit Card? Call us at 703.584.3400, option 2, or 800.473.3247, or visit a banking office near you. Current customers will receive EMV chip cards as their existing cards expire or if lost or stolen.