Did you know the United States is responsible for 50% of all worldwide credit card fraud? EMV chip cards - the new standard for paying with debit and credit cards - make their arrival this month. Here's what you need to know about the new changes to your card.
What is EMV?
EMV technology is a type of chip technology that is quickly becoming the global standard for credit and debit card security. EMV, an acronym for Europay, MasterCard, and Visa, is the better, safer way to pay in person with your card or through mobile devices. Chip cards have been widely used in many countries for over a decade, proving to deter criminal card activity and representing 45% of card purchases around the globe. The United States, which has the most cases of credit card fraud worldwide, has been making the widespread transition to chip technology on a national level since the end of last year. In fact, 500 million chips cards will be active nationwide by 2016. This new technology means more security for you and your card, reducing the chances of fraud and also allowing you to use smart phone applications to make purchases.
(Infographic Source: R Magazine)
How Can I Tell If a Card is a Chip Card?
As opposed to traditional magnetic stripe cards, chip-enabled cards are embedded with a microchip, as featured in the image below. Chip cards will look just like traditional magnetic stripe cards, only they will feature an embedded chip in addition to the magnetic stripe on the back of a card. Traditional magnetic stripe cards allow for data to be easily copied by criminals, enabling them to produce counterfeit cards. Businesses will still be able to swipe your card, except microchip encryption will now be at work to protect you and your purchases.
How Do Chip Cards Work?
Chip cards may require the use of a PIN or a signature to complete your transactions, and the microchip itself provides an extra level of security - proving that your card is authentic. Scanners, card readers, and other devices will communicate with the microchip to authenticate your card and typically will require you to then enter your PIN or validate your identity with a signature. If the business does not offer a chip reader, traditional card readers will also be able to read the magnetic stripe on the back of the card. Your card must remain in the chip reader until your transaction is complete.
How Will Businesses Be Affected?
Major card companies have announced that any businesses who do not accept chip cards may be responsible for counterfeit cards resulting in fraud, meaning that the business will, in most cases, be financially liable. This is referred to in the industry as "liability shift", which has been in effect for merchants since October 1, 2015. For MasterCard holders, ATM operators will also experience liability shift by October 1, 2016. Preventing card fraud is the primary reason card issuers and financial institutions are utilizing chip technology. Businesses will still be allowed to use traditional card readers but should be aware of the liability involved. Businesses are not required by law to support the use of chip readers at this time.
EMV and Telcoe Members
All of our MasterCard credit cardholders received their new chip credit cards at the end of January 2016 for use starting February 4, 2016. Any transactions attempted on your current card as of February 4, 2016 will be declined. Identify any automatic payments currently set up, as you will need to provide vendors with your new credit card information to ensure that there is no interruption in your bill payments. If you have any questions about this change, email firstname.lastname@example.org or call us at 501-375-5321.
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