1-800-636-7622

Wealth Management

What Everyone Should Know About EMV Cards

Courtesy of NerdWallet
 
Americans report billions of dollars in credit and debit card fraud each year. A new technology using microprocessors called EMV chips could help curb future losses.
 
The chips are embedded on the front of credit and debit cards and exchange information with chip-card readers. Used together, the two make it harder for fraudsters to copy card information and make bogus in-store purchases.
 
Here's what you need to know about EMV cards.
 

How EMV works

If you have an EMV card, you'll insert the chipped end into a slot on an EMV-enabled reader, instead of swiping. Leave the card there for a few seconds, while the chip exchanges information with the payment processing system and authenticates the account; then remove it. Depending on the account, you might also sign for the purchase or enter a personal identification number, or PIN, to verify your identity and complete the sale.
 

How chips protect you

 
Named for developers Europay, MasterCard and Visa, EMV chips encrypt your information and generate a unique code each time you use your card. Each code can be used only once — so they're useless to hackers.
 
Traditional cards use a magnetic strip that transmits the same unencrypted information every time you swipe. If someone copies the data, he or she can easily duplicate your plastic and use it to make fraudulent purchases.
 

Where they're used

 
EMV-enabled cards are already the standard in parts of Europe, Asia, Latin America and the Middle East. In the U.S., where credit and debit card fraud losses have risen steadily over the past few years, retailers and issuers are slowly catching up. Many issuers have sent new EMV cards to customers, and chip-card readers are becoming more common at stores across the U.S.
 
Banks, credit card companies and merchants in the U.S. picked up the pace of adoption last fall, when new fraud liability standards went into effect. It used to be that credit card issuers bore the brunt of fraud losses, but responsibility now could fall to the retailer (link sends e-mail), if its system is less secure than the card used.
 

What it means for you

 
Actually using an EMV card might, at least the first few times, mean overriding muscle memory. Instead of reflexively swiping your card, you insert it into a slot and leave it there for a few moments while it gets read and while you enter your PIN. Many readers help you along, reminding you to leave your card inserted and then telling you when it's OK to remove it. The process can take a bit longer, and different readers can require different steps, but it's small inconvenience for the increased security. 
 
Furthermore, EMV technology makes it easier to use your card in the myriad countries that already have the technology. (Traditional cards can still be used most places too.)
 
Although EMV technology helps you shop more safely, it doesn't thwart thieves entirely. Hackers can still pilfer your card information (link sends e-mail) online or over the phone, or simply steal your card. So it's wise to exercise caution when using your credit or debit card. If your card goes missing or you spot suspicious activity, notify your financial institution immediately. 
 
© Copyright 2016 NerdWallet (link sends e-mail), Inc. All Rights Reserved
 
 
 
This website and the articles and other media contained within (the “content”) are provided as a free service to you and are for general informational purposes only. The content is provided to us by our vendors, and our vendors may obtain their content from other parties. While we have vetted our vendors from whom we directly receive content, and believe that our vendors have vetted their providers, we do not control the content and we make no representations or guarantees as to the accuracy, completeness or timeliness of content on this website. Information on this website is not intended to provide legal, accounting, tax or other advice. We also make no warranty or representation regarding, and do not endorse, any linked websites or the information contained therein.

Questions? We are here for you.

Here are some other ways to contact us.

* To ensure your safety, please do not include sensitive information in your submission.