Why Do I Need an EMV-Enabled Credit Card?

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Although it may seem impossible, credit card fraud still continues to be an ever-increasing problem, and more than 50% of the entire world’s credit card fraud happens right here in the good ol’ US of A.

Credit card companies have stepped up to address this problem by creating a technology that will make it much more difficult for your personal information to be stolen. The technology comes in the form of a small chip that is implanted into consumers’ newly issued credit cards, called an EMV chip. EMV stands for Europay, Mastercard and Visa because these were the companies that initiated the new technology.

Many Americans have heard about the EMV chip and may feel a lot more secure now; however, it’s important to know the whole story before you let your guard down. Simply having a card with a security chip won’t help you at all unless the stores you patronize have upgraded their credit card machines to be able to actually use the chip.

Swiping your credit card through a retailer’s card reader is like dangling your personal information in the face of a data thief. Magnetic stripe card readers are easy to bug and, in turn, easy to commit fraud through. It has been predicted that credit card fraudsters are in the process of targeting as many magnetic stripe payment machines as possible, while they still can.

Those retailers who have switched their payment terminals over to include a card reader will benefit greatly. If any data breaches occur in stores with card readers, the stores will not be held responsible. This is a huge incentive for retailers to get with the program and update their payment machines.

If a breach occurs while using an EMV-ready machine, the bank (who owns your credit card debt) will be responsible to remedy the situation. Luckily, data breaches are much less likely on EMV-ready machines because the consumer’s credit card is inserted into a card reader that will generate a code that is totally unique to that shopper.

This all sounds like a fantastic step toward lowering the amount of credit card fraud that is currently taking place in the US (and around the world). The problem is that stores are not required to implement the EMV readers. Magnetic strip cards will still be processed the same as before – by swiping.

What you should know:

As a consumer, you should protect yourself by using only credit cards with data chips installed. If your bank has not issued you an EMV card yet – get on the phone and request demand one. Once you have received a new card, try to do all (or at least most) of your shopping at stores that have updated their sale terminals to be able to read EMV chips. Insert your card into the card reader; avoid swiping at all costs!

Naturally, you’re never going to be 100% safe, especially if you do a lot of online shopping. The best way to protect yourself online is to limit web-based purchases to sites that have a solid reputation. We will delve into how to safely shop online in an upcoming blog post.

Image (used with permission) by Aranami

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One Response to Why Do I Need an EMV-Enabled Credit Card?

  1. Pingback: How to Avoid Losing Your Money to a Scam Artist | Veitengruber Law

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