EMV – What is it?
EMV – which stands for Europay, MasterCard, and Visa – is a global standard for cards equipped with computer chips.
This chip-and-sign technology is a new standard for integrated with the latest technology infused computer chip and their associated readers. These chips are designed to protect consumers from large-scale data breaches, counterfeiting, fraud and fraud-related costs.Circuit chip credit cards. Moreover, rather than being swiped, these chip cards must be inserted into a payment terminal equipped to read the chip. The technology embedded in the chip, essentially a tiny computer, creates a unique impression every time it is used, making it more secure than the magnetic-stripe technology.
Should you care? Yes! For merchants and financial institutions, the switch to EMV chip cards requires an addition of new in-store technology, internal processing systems and compliance with new liability rules. For consumers, it means activating new cards and learning new payment processes at the checkout line. Unfortunately, EMV chip security does not extend to on-line purchasing.
Although October 1 was the deadline for rolling out this wizardly chip card technology, it remains to be seen if all financial institutions issuing new credit cards to customers, and all retailers who accept them, are ready. According to the PULSE 2015 Debit Issuer Survey, 90% of financial institutions are currently issuing the EMV debit cards and will continue to do so by the end of 2015. However, only 25% of U.S. debit cards will have the chip by the end of 2015, 73% by the end of 2016 reach, and 96% by the end of 2017.
According to the Federal Reserve Bank of Chicago, a majority of EMV cards in consumers’ hands are being sent by larger financial institutions including Chase and Bank of America.
Due to high transition costs, smaller banks and credit unions are slower to convert. These conversion costs have also deterred a majority of retailers from adopting the new software in addition to the late release of specifications needed in order for the conversion to take place. Complete details surrounding the conversion process were not issued until the end of 2014, offering very little time to meet the October 2015 launch deadline.
Despite all that’s involved in implementing the chip technology, we can all breathe a collective sigh of relief. With the holiday shopping season upon us, consumers need not worry about purchasing hassles. The first round of EMV chip cards still have the traditional magnetic strip. This enables your preferred retailers to swipe your chip card as usual. The only difference is the extra level of security promised with the chip won’t apply.