What You Need To Know About The Computer Chip In Your Debit/Credit Card

EOD_EmvPicI was expecting a new debit card in the mail, as my current was one expiring soon. When I received it in the mail, I instantly noticed something different about it; a small computer chip was embedded on one side of the card. I knew what it was, but I was surprised that my small regional bank was using the technology. Before activating and using the card, I wanted to review what this chip was all about.

What is EMV?

EMV, or Europay, MasterCard, and Visa, integrates a tiny computer chip into your card to store information about your account and the card issuer. Despite it’s name, it has been adopted by all major card issuers including Discover and American Express. Instead of swiping the magnetic strip through a card reader, users insert an EMV card into a slot and the technology generates a unique transaction code. This differs from the magnetic strip technology where all the information is fixed. It is the unique transaction code that makes EMV cards difficult for counterfeiters to copy, giving users more protection against fraud.

Do I Still have To Worry About Fraud?

While EMV cards are more difficult to counterfeit, there are still possibilities of fraud that consumers need to worry about.

Internet Transactions

Consumers don’t use a physical card for internet transaction. All that is needed is a card number, thus the EMV chip technology doesn’t come into play. Until additional online security measures can be put in place, consumers should continue to be careful when making online purchases such as:

  • Ensure sites used for purchasing are encrypted
  • Never initiate transactions from a public computer
  • Always log out of accounts when finished.

Security Breeches

Once your information is in a merchant’s database, it is vulnerable to criminals who might hack into their system and steal your information. Consumers should always review their account information frequently for suspicious activity.

Fraud Liability

Traditionally, the retailer has been in the drivers seat when it comes to liability if fraud should be reported. Technically, a transaction is complete once a card is swiped. However, if the merchant makes any attempt to verify the authenticity of the card user by way of a PIN or signature, a the card issuer is held liable for any fraudulent charges. If no attempt to verify the card user is made, then liability falls with the merchant.

Liability Shift

As of October of 2015, the determination of liability changed to encourage card issuers and merchants to switch to EMV enabled technology. In the case of fraudulent activity, the liable party is determined by who is less EMV capable. If the retailer has upgraded their equipment and has EMV card readers available, but the card used in the transaction was not an EMV card, then the card issuer is held liable for the charges. However, if the card used had an EMV chip, but the merchant did not have an EMV card reader, then the merchant is responsible for the amount of the charge.

EMV Chip readers are becoming more common with major and local retailers. Even though there is a cost for retailers to upgrade to the new technology, it makes sense as it shifts the liability back to the card issuer. While it may take a few extra seconds to perform a transaction using EMV technology, the extra protection for retailers, and customers is worth it.

Does your debit or credit card have an EMV chip? Have you noticed an increase in EMV card readers at retailers?

About Travis

2 Responses to “What You Need To Know About The Computer Chip In Your Debit/Credit Card”

Read below or add a comment...

  1. John says:

    Been using them in Canada for years. So long can’t remember how long. Can you tap to pay with them yet or you still behind there?

Leave a Comment...

*

This site uses Akismet to reduce spam. Learn how your comment data is processed.