What are EMV Cards and Who Needs to Use Them?

If you glance at your credit card or debit card, you may notice something different about it, versus the cards you remember from not too long ago. On the back, you can probably see the standard black magnetic strip. If your card is newer, you might also see a new small metallic chip somewhere at the front. It’s made of shiny metal and looks a bit like the chip on a mobile phone SIM card. That chip is what makes your credit card an EMV card. If it has both the chip and the magnetic strip, then it’s described as a chip-and-PIN-card.

EMV stands for Europay, MasterCard, Visa. These were the first three companies to develop EMV card technology, although many other card brands have since taken it up. Eventually, it’s expected to be a global card standard. The reason EMV was developed is that many card fraud schemes extract data from a credit card’s magnetic chip, and then use it to make a dummy card and access the account. It’s relatively easy to copy this data, because it’s static.  EMV chips work differently.

Data on the move

Conversely, the encrypted information on EMV chips is constantly shifting. Every time you do a transaction, the chip generates a different one-time code. So, even if somebody skims the card or manages to intercept your data, they won’t be able to use that information for another transaction, and if the interceptor tries to use the replicated dummy data, the transaction will be blocked. This protects credit cards from skimming, although the card can still be physically stolen, in which case the cardholder would have to call their bank or credit card company to have it blocked.

From the customer’s point of view, the process of ‘swiping’ an EMV credit card is different. Instead of sliding the card, the cardholder ‘dips’ (i.e., inserts) the card into the POS (point of sale) terminal chip-first, and then waits a few seconds while the transaction completes. It takes a bit longer than swiping, but it’s much safer, and as at last year, it was said to have reduced card fraud by 58%. Businesses can still accept regular credit cards if they have a magnetic strip, and most new cards are still chip-and-PIN.

Making the move to EMV

To protect customers, it is highly recommended that any business that accepts credit cards face-to-face should get an EMV reader. Business owners can talk to their existing merchant account processor to see whether they provide EMV terminals.   For more information on EMV credit cards and EMV credit card readers, or to sign up for a merchant account, please call (888) 924-2743 or go to Charge.com.


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