EMV Credit Cards: What You Need to Know

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In order to beef up credit card security and offer more protections for consumers, merchants in the U.S. began implementing EMV technology on October 1 of this year. Commonly referred to as "chip technology," EMV takes its name from "Europay, MasterCard, and Visa" and has been the standard for credit safety in many other countries for years.

But, what is EMV? And how does EMV technology work? According to Chase Bank, cards with EMV technology feature "embedded microprocessor chips that store and protect cardholder data." Also called "chip and pin" or "chip and signature" this technology was implemented with the goal of increasing security and reducing card-present fraud.

EMV Technology: What You Need to Know

Better security for your credit transactions sounds great, but how will they affect your experiences with credit? Here are a few of the key changes you may notice in the coming months.

You may get a new card in the mail

Although most card issuers have sent out cards with the updated technology by now, it's taking some longer than others. If you still have a card with a magnetic strip, continue using it as you always would and wait for your new EMV-enabled card to come in the mail. If you're not willing to wait, you can always call your card issuer and ask them to send you a card with the new technology or simply shop for a new credit card with EMV technology and better perks.

The main difference you'll notice with EMV cards is that you'll "dip your card" in the terminal instead of swiping it like you normally would. You'll accomplish the same thing by doing it this way, but with the added layer of protection that comes with using EMV technology.

Your magnetic strip card may not work at certain retailers

During this transition, you'll find a lot of cards that come with chip technology and a magnetic strip like you've always had before. By having both, you'll still be able to use your card if a retailer hasn't installed the new technology at their registers.

However, it should become increasingly difficult to find retailers who accept magnetic strip cards as time marches on. As more and more retailers get on board, the old way of swiping your card should eventually go the way of the dinosaur.

EMV technology doesn't improve security for online transactions

While EMV technology improves security for transactions made in person, it doesn't change much for any purchases you make online. Since you'll still type your card number into your computer when you make a purchase, the chip technology won't be able to encrypt the details or offer any additional protections.

To keep your online transactions as secure as possible, make sure to only give your information to reliable, trustworthy websites and keep your number private whenever possible. While the risk for fraud isn't going away, keeping your card details to yourself can go a long way towards helping you avoid any unsavory issues.

Expect shifts in liability for fraudulent purchases

While changes in liability may not affect you personally, it's important to know what is going on behind the scenes. As of October 1, liability for all credit card fraud will fall on the party without EMV technology – or the least compliant party. In other words, when someone steals your card number and makes a purchase, either the card issuer or the retailer – whichever is least up-to-date with EMV technology – will take financial responsibility for the breach.

Because of the implications of this, you should see retailers and card issuers implementing the new technology fairly quickly in coming months. With a huge data breach always lingering on the horizon, companies want to do all they can to avoid that liability and the financial losses that would surely come with it.

Final Thoughts

By encrypting each transaction, EMV cards should make it more difficult for thieves to become privy to your card's individual details. And over time, that should save all of us from the headaches of credit card fraud and the resulting chaos.

But that doesn't mean the transition will go smoothly. Because not everyone knows about the changes, you may experience long lines and some frustration at the register as consumers become acquainted with the new cards and new process. Fortunately, we should come out the other end with a better process for protecting consumers from fraudsters – and greater security of our personal information.

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