by Vanessa Diem
Recently, the U.S. Credit Card Industry is shifting to a better secure credit card type –the EMV credit card, which is also known as the chip-and-signature or chip and PIN credit cards.
You very probably have received a new card from your mail that has a resemblance to your old card, but for the metal square, it has in its front, just on top the card number. (The metal square is an overlay for the protection of the chip).
The EMV Credit Card –which is named for Visa, Europay, and MasterCard, the companies who are the creators of the standard –is a more secure type of credit card. Just like the magnetic strip you see on your old credit card, the function of the chip on the EMV credit card is to hold sensitive information about your credit card and to transmit this information to payment processors in such a way that criminals will find it more difficult to hack and use.
Definitely, the technology of chips in credit card will bring about a change in the way you make use of your credit card as it concerns face-to-face transactions, but every other thing will remain the same.
When using your EMV credit card to make a purchase at a terminal that is EMV-enabled, there is a slot providedbelow the numeric keypad for you to “dip” your credit card. Insert your credit card in the slot and follow the instructions that will appear on the screen. Seeing that the transaction is not a ‘swipe-and-go’ motion like the magnetic strip card, you must have to leave your card in the slot until the transaction is done.
Checking out in transactions with EMV credit cards might take longer than what you are already used to, especially as cashiers and cardholders are still familiarising with the new process. Transactions with EMV credit cards also take a little longer time to process compared to transactions that involve swiping your credit card.
The EMV enabled transaction technology isn’t available to every merchant, even for some who have the terminal installed. If you are at such terminals that are not EMV-enabled, it doesn’t matter if you have an EMV credit card or if you do not, you will have toswipe your card in one quick motion to get the transaction process completed.
It is the same processes involved for online purchases, even when you are using EMV-chip enable credit cards. You still have to enter your card number, security code, billing address, and expiration date.
Many other countries have made use of the Chip-and-Pin version of the EMV card for years. These cards make use of chip technology to function, and they require a PIN to be entered by the cardholder for the transactions just as you do when you make use of your debit card as ‘debit’.
The U.S. credit card industry is gradually shifting to chip-and-signature technology. What this entail is that you will have to sign for your card purchases just as you have been doing. The industry may adopt the technology of Chip-and-PIN for a credit card shortly. Debit cards present the opportunity to either enter your PIN or to sign the receipt and skip the PIN, competing as a ‘credit’ transaction.
Also, If your card is contactless, a contactless symbol will be imprinted in front of the card. You can complete your transaction by tapping your credit card on the credit card reader.
The two primary reasons for switching to EMV credit cards are to reduce frauds that involve credit cards and to shift more liabilities to merchants. This credit card technology is better than the conventional credit cards which only hold information on the magnetic strip.
A small computer strip is contained on EMV credit cards to create a unique code for every transaction, and that send these codes through the credit card processing system for the authorisation of the transaction. Once the code has been used once, it can not be used again. So, even when a hacker can access the code, they cannot use it again even if they try to make transactions, seeing that the code has already been used before.
Considering these, it is virtually impossible with Chip technology for criminals to use your credit card information to create counterfeit cards, assuming you always make use of EMV at checkout.
While it is expected that chip technology will help to reduce credit card fraud in the long run, there is still possibilities of fraud occurring in the short term. Not every retailer is disposed to process EMV chip credit cards. Thus, it might even be necessary for you to swipe your card at some places, whether or not your card is equipped with a chip. Purchases made with swiped credit cards are equally exposed to risks of fraud. More, thieves are still capable of using credit cards that are physically stolen.
It isn’t required for gas stations to adopt this technology till 2023, October to be precise. (The deadline was originally supposed to be October 2017.) Gas stations can be said to have been relatively favoured by hackers of credit cards because it is easier to install credit card skimmers. In the next few years though, there might be an increase in fraud cases at gas stations.
There is still the same risk of fraud for online transactions. Hackers might stand better opportunities at phishing –tricking you into surrendering sensitive information about your credit card by pretending to be a business or person thatyou know and trust. They might also take advantage of businesses where you have saved your credit card number to enable recurring subscriptions or one-click shopping. It is best to practice safe habits continually while shopping online.
The credit card industry set a deadline for the switch to EMV cards for the 1st of October 2015, but then, not every issuer of credit card have been able to mail new credit cards to all the people who hold their card. You can continue to use your old card as usual, pending the arrival of your new ones. However, you shoulddestroy the old one once the new one arrives.
If you are yet to receive a new card, then it most probably is because your card issuer is yet to issue one to you. It is possible they (your card issuer) are not offering the EMV technology for your particular card or that they are not offering any EMV card. There is a list of all the credit card issuers in the U.S. who have available EMV credit cards at the EMV Migration Forum. If you have any query on how long it will take to receive an EMV card for your account, you can contact your card’s customer service.
A higher percentage of retailers have accepted EMV credit cards in place of their credit card terminals already, the reason partly being they can afford to do so, and partly because a high number of retailers are prone to lose quite an amount of money if there is a case of fraud and they have not adopted the EMV technology.
Owners of smaller-scaled businesses who are not aware of the costs and risks of fraud might take more time to adopt the new technology. They might perceive the increased protection as unnecessary because of the nature of their business and their low volume transactions. Unfortunately, however, not adopting the EMV technology might lead to disaster for some small businesses, seeing that credit card thieves could shift their attention to businesses that are not EMV-oriented. Just one data breach might take a small-scale retailer completely out of business.
Credit card fraud protections still apply to consumers. Credit issuers, credit card processing networks, merchant banks and merchants will decide who amongst them are to bear the cost of fraudulent credit card activities.
While the credit card industry has made ‘liability shift’ impositions for fraudulent transactions, this shift shouldn’t be cumbersome for credit card holders. Cardholders are not responsible for fraudulent transactions that involve their credit card while it is in their possession and can only incur a maximum of $50 liability on fraudulent purchases made when their credit card is lost or stolen.
If you get suspicious of fraudulent activities with your credit card, contact the issuer of your credit card with the number on the back of the card, and they will brief you on how best to proceed.
About Vanessa Diem
Vanessa Diem is a finance blogger who has gained widespread recognition for her insightful and informative content on personal finance, investing, and money management. With a keen understanding of the complexities of the financial world, Vanessa is dedicated to providing her readers with practical advice and strategies to enhance their financial well-being.