What is a Chip Card?
EMV (Europay, MasterCard, Visa) is a technology that embeds a microchip into
your credit and debit cards. At the time of purchase, the embedded EMV chip
transmits a one-time code, so your credit or debit card information isn’t
really part of the transaction, making it harder for hackers to intercept your
information and make illegal duplication of the card.
Why a Chip Card?
EMV technology will no longer allow you to swipe your card during transaction.
Instead, you will insert your card into the reader slot for processing and
either enter a 4-digit PIN or provide a signature.
According to the Federal Reserve, with Chip and Pin there is a 700%
reduction in fraud compared to signature-based cards. In the first five years
after the UK started using Chip & PIN (2001), fraud dropped by 70%!
During that same time period, the
cost for fraud in the U.S. doubled!
When is it happening?
October 15, 2015 was the deadline for businesses to replace existing credit and
debit card readers with EMV card readers. If a business fails to implement the
new card readers and fraud occurs, then the financially liability will shift
from the issuing bank to the merchant.
How do you use a Chip Card?
The U.S. will implement EMV technology over two phases:
Although Phase 1 will make credit cards harder to clone, it WILL NOT make them
harder to use if they get into the wrong hands. Therefore, continue to closely
monitor your accounts and personal information to help you avoid becoming a
victim of fraud. Phase 2 implementation WILL make credit cards harder for
thieves to use, which is even more reason to support the transition to the new