What Everyone Should Know About EMV Cards
Americans report billions of dollars in credit card fraud each year. The technology known as EMV is designed to curb those losses.
EMV chips are microprocessors embedded in credit and debit cards that exchange information with card readers at retail checkout locations. The technology makes it nearly impossible for hackers to use card information from an in-store purchase to commit fraud.
Here's what you need to know about EMV cards.
How EMV works
When using an EMV card, you insert the chipped end into a slot on an EMV-enabled reader, rather than swiping the card. You leave the card there for a few seconds while the chip exchanges information with the payment processing system and authenticates the account, then you 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 in a store. Each code is used only once — so they're useless to hackers.
Traditional cards use a magnetic strip that provides 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 is the standard for transactions 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. The pace of adoption picked up in October 2015, 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, 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. 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 a small inconvenience for the increased security.
Furthermore, EMV technology makes it easier to use your card in the 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 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.
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