Tuesday, December 29, 2015

The Scoop on Credit Card Chips

If you’re a credit card user, you may have noticed your old card was replaced with a new one, featuring a small metallic chip on the face. According to CreditCards.com, this chip, known as EMV (which stands for Europay, Mastercard and 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 credit card fraud, card issuers are migrating to this new technology to protect consumers and reduce the costs of fraud. Here are three commonly asked questions about the new EMV cards:

How are the EMV chips safer?
EMV chips create a unique code for each transaction, which ultimately means your credit card information is constantly changing. Before, a credit card thief would only need to get the card information by either stealing the numbers from the card itself, or skimming the information that was previously stored in the card’s magnetic strip. Your card’s data stored in the magnetic strip was unchanging, so thieves could complete transactions with your account again and again until the fraud was caught by you or your banking institution. The new cards make it difficult to duplicate information, and cannot be skimmed because the “dipping” method of inserting your card into a reader rather than swiping.

How do I use it when paying for my purchases?
At participating retailers, your new chip-protected credit card will be read in a similar card reader, only a different way. Instead of swiping your card along the right, there will be a slot at the bottom of the reader for you to insert your card. Once your card has been inserted, the reader will hold your card for several seconds while reading the information and verifying the transaction. It will take a little bit longer than the traditional swipe method, because you are required to leave your card dipped in the machine while it is verified. The machine will let you know when you can take it back out, though! Unfortunately for online shoppers, the chip offers no extra protection in cyberspace. When shopping online, always be sure you’re surfing the sites of reputable retailers.

What if a store I frequent doesn’t have a chip reader?
No problem! The first round of EMV cards will include a traditional magnetic stripe as well as the chip. That way, if a store hasn’t yet converted to the new chip readers, consumers will still be able to swipe their cards the old-fashioned way. Eventually, when all merchants have updated their point-of-sale systems to read EMV chips, new credit cards will be issued sans stripe.

Change can be hard to adjust to, but in this case, it’s all for the better! The new cards are safer, and will show a substantial decrease in credit card theft as more merchants move to chip readers. For those who still have Christmas shopping to do with their new EMV cards in hand - thankfully credit card fraud is one less thing to be worried about this season!