EMV Card Series – Pt 1: What is it and How does it Affect You?

(This is the first in a series on EMV technology; designed to thwart fraudulent credit and debit card activity.)

In the ongoing effort to fight back against credit and debit card fraud, EMV technology is the latest layer of card user protection. Although it may not be completely foolproof, it’s definitely making it more difficult for crooks to steal your card’s information.

EMV – which stands for Europay, MasterCard and Visa – is a global standard for credit and debit cards. Each card is embedded with a computer chip tethered to authentication technology used during chip-card transactions.

EMV cards are intended to replace those containing the magnetic strip currently featured on the back of most cards. Magnetic strip transactions process unchanging data (e.g. card number and expiration date); making it easier to steal your information and create counterfeit cards, while the chip card transaction exchanges dozens of pieces of information from the card to the checkout terminal and the acquiring bank or processor host. Each time an EMV card is used for payment, the chip creates a unique transaction code that cannot be used again. So if a thief creates a fake card based on stolen transaction information, the card will be denied because the information will instantly be outdated.

Although EMV technology is starting to deploy across the United States, it’s been used in Europe for quite some time. For financial institutions and merchants, the switchover in the U.S. requires adding new in-store technology and internal processing systems, while complying with new liability rules. It also means issuing millions of new cards to consumers like you, who will need to activate your cards and learn a new process for making payments.

According to Smart Card Alliance, a not-for-profit, multi-industry association working to stimulate the understanding, adoption, use, and widespread application of smart card technology – approximately 120 million U.S. consumers have already received an EMV chip card, and that number is projected to reach almost 600 million by the end of this year,

How do you know if you already have an EMV chip card? Look for a small, metallic square on the front of your card, like the one shown in the picture above, featuring a computer chip that’s been embedded into the card. You may have already heard some of the names being used for cards with EMV technology such as the “smart card”, “chip card”, “smart-chip card”, “chip-and-choice card” and/or “EMV smart card.”

As mentioned before, cards with magnetic stripes contain data that doesn’t change from one transaction to another. That makes these cards easy targets for data thieves, who use this stolen data to create counterfeit cards, showcasing the switch to EMV technology as beneficial step in helping keep your information safe.

EMV technology is a powerful weapon for consumers, merchants, and financial institutions as the battle wages on against fraud and data breaches.

Up next: How do you use an EMV card, and what happens after you do?

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