EMV chip cards: Protecting Your Family

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EMV chip cards

My family travels a lot. The kids have already been to 20 countries and my passport has close to 70 stamps in it. Having credit cards has made it incredibly easy to explore the world. When we land, rather than having to rush to currency exchange, we can head right to our hotel (paying the cab driver with a Visa) and charge most of our expenses.

It's liberating to NOT have to carry around wads of foreign cash.

But one thing always concerns us with travel. Is our credit safe?

Every time we swipe and sign, it feels like I'm opening up our family to a risk of fraud. On our last trip to Europe, I noticed a difference on the transactions. NO MORE SWIPE. It was more of a plunge. The newest safety measure is a chip embedded into your credit card.

Guess what? The chip is coming to the U.S.! On October 1, the U.S. will officially transition to the use of EMV chip cards for payment in stores across the nation. This is good news for everyone (well, except criminals). Even if you don't travel as we do, you can take another money worry off your plate. The chip is an additional layer of security that protects your personal data when your credit or debit card is used to make purchases. It could be in Paris or it could be at the grocery store.

EMV chip cards how they work

Get ready to take the PLUNGE. The new chip card will be slightly different to what you're used to. When you pay for something you won't swipe. Instead, you “insert” (plunge!) your card into the new payment terminals. It'll be a bit of a transition, by current estimates 47% of terminals will be able to read chip cards by the end of the year.

Last year I noticed my Visa had a chip in it. You may have gotten one too. Across the country folks are getting new credit and debit cards that use more secure chip technology. According to Visa, 63% of cards will be chip-enabled by the end of 2015. I'm all in for the switch.

Don't freak out if your card doesn't have the chip yet. You can still swipe. And the good news is with Visa you are always protected with zero liability fraud protection. The change will cut down on the hassles and costs.

The chip creates a unique code that is connected to your transaction. The coding protects us against counterfeit fraud. Why now? I asked Stephanie Ericksen, Visa’s vice president of risk products, that same question. Stephanie says, "The U.S. is adopting EMV chip cards now because of the increased security benefits it brings and the growing sophistication of hackers."

This code makes chip card data nearly impossible to be reused by criminals for counterfeit fraud in a store. As someone who's been the victim of credit card fraud (someone once purchased 4 new mac laptops on my card in 2009), I'm embracing this change. Criminals are going to have to find something else to do. My data can’t be used for counterfeit fraud.

I got to chat a bit more with Stephanie Ericksen to get more scoop.

1. How did this new chip technology come about? The electronic payments industry developed EMV chip. Since Europe lacked a robust telecommunications infrastructure, chip technology was first adopted by the European markets because it provided a security solution for and supported an offline payments system. Why now? The U.S. is adopting chip now because of the increased security benefits it brings and the growing sophistication of hackers.

2. I notice in Europe everyone has PINS on credit cards. Is that next? Chip cards – whether they accept a signature or a PIN – are the first step in moving our nation towards accepting more secure payments. Issuers have the ability to select either a chip and signature or chip and PIN feature of the debit or credit card. As with chip cards, the industry does not view PIN or signature alone as a complete long-term solution and is implementing more dynamic procedures for the future, such as tokenization. Despite which authentication feature is accepted, the U.S. will see a reduction in counterfeit fraud with the adoption of chip card technology.

3. Why can't these cards be swiped? The new chip cards contain a small chip on the front of the card that adds a unique code to each transaction that cannot be used for counterfeit fraud. For the terminal to read this new chip, consumers will be asked to “insert” their cards into the new payment terminals rather than “swipe” their cards. This feature makes chip card data nearly impossible to be reused by criminals for counterfeit fraud in a store. While the technology catches on, consumers can still safely use their card as a swipe. And no matter how consumers use it – swipe or insert – they are always protected with zero liability fraud protection.

4. What is the predicted decrease in CC fraud? Widespread use of chip technology has been shown to reduce fraud by over 70% two years after adoption. As chip technology becomes widespread among consumers and merchants, criminals will have less and less incentive to hack into large retailer computer systems – because the data can’t be used for counterfeit fraud, which represents about two-thirds of fraud in stores.

5. Is Visa on the vanguard on this? Security is one of the most important benefits of using Visa and we want to make sure consumers remain confident in electronic payments. And, because chip is an important part of this fundamental change in the payments system, we’re committed to helping consumers and businesses make the shift. Visa has been leading ongoing, education campaigns targeted to consumers and businesses that support the transition to accepting and processing chip card payments. This includes providing a variety of resources, business toolkits and tutorials on our website (visachip.com) and visiting cities across the nation, partnering with small businesses and consumer organizations to support all Americans through one of the most significant shifts the payment industry has seen in decades.

I want to travel and shop securely. I've got enough to worry about--like where are we going on our next trip!

nicole feliciano

Get ready to take the plunge. Find out more details visachip.com

This is a sponsored post.

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