EMV Chip Card 411
What is an EMV “Chip” Card?
Chip cards are payment cards that now have an embedded microchip in them. Chip cards offer advanced security when you use them for in store purchases or at an ATM machine. Chip cards are based on a global card payment standard called EMV. EMV stands for Europay, MasterCard & Visa. This payment standard is currently used in more than 80 countries and the United States is finally migrating to EMV.
The chip card works by storing the cardholder’s financial data on the microchip and uses a one-time security code to approve each transaction. The chip, like a magnetic stripe, stores the 16 digit account number and expiration date of the card. This information along with the security code is what fraudsters look for to make counterfeit cards. With this chip technology the security code for every transaction is different and almost impossible for fraudsters to figure out. EMV technology is effective in fighting counterfeit fraud. This type of fraud accounts for about two thirds of fraud committed in stores.
Many merchants now have chip enabled terminals. However, merchants and ATMS will still have the capability to accept magnetic stripe cards. The new cards will come with both the chip & magnetic stripe. The terminal will prompt you to use as a chip card if the machine is enabled. There is no impact to the cardholder when using an EMV card, other than terminals requiring that the card remain inserted for the duration of your transaction versus the swipe method that most consumers are used to.
Stay tuned for more information as the deadline to issue these cards approaches. Watch your renewal cards when they come in the mail and see if they are chip enabled. If you have any questions contact your financial institution.