The nationwide shift to EMV is well underway.
EMV: stands for Europay, MasterCard & Visa, is a global standard for cards equipped with computer chips and the technology used to authenticate chip-card transactions. In the wake of numerous large-scale data breaches and increasing rates of counterfeit card fraud, U.S. card issuers are migrating to this new technology to protect consumers and reduce the costs of fraud.
Why EMV cards? The small, metallic square on the new cards is a computer chip and what sets it apart. The magnetic stripes on traditional credit and debit cards store contain unchanging data. Whoever accesses that data gains the sensitive cardholder information necessary to make purchases.
Unlike magnetic-stripe cards, every time an EMV card is used for payment, the card chip creates a unique transaction code that cannot be used again.
If a hacker stole the chip information from one specific point of sale, typical card duplication would not work because the stolen transaction number created in that instance wouldn’t be usable again. EMV technology will not prevent data breaches from occurring, but it makes it much harder.
How do I use an EMV card? Just like magnetic-stripe cards, EMV cards are processed for payment in two steps: card reading and transaction verification. At the point of sale, you would insert the top part of the card with the chip into the reader instead of a swipe.
If fraud occurs, who will be liable for the costs? Today, if an in-store transaction is conducted using a counterfeit, stolen or otherwise compromised card, consumer losses from that transaction fall back on the payment processor or issuing bank.
After the October 1, 2015 deadline created by U.S. credit card issuers MasterCard, Visa, Discover & American Express, the liability for card-present fraud shifts to whichever party is the least EMV-compliant in a fraudulent transaction.
Date of completion? Although the upcoming deadline is strong encouragement for all payment processing parties to become EMV-compliant, the Aite Group estimates that by the end of 2015, approximately 70% of credit cards and 41% of debit cards in the U.S. (1.1 billion cards total) will support EMV.
While many chip cards have already been issued, some people may have to wait longer than others before sent a new EMV card.