As a countermeasure to thwart fraud, EMV “smart card” technology (a joint effort of Europay, MasterCard, and Visa) was concocted in the 90’s and rolled out during the 00’s throughout the world … but not in the USA. Although some cards with EMV chips have been making their way to the U.S. market, it’s been a slow trickle.
Why? Well, there isn’t exactly a huge demand for them. Unless you’re traveling abroad, you don’t really have an everyday need for a chip card, as few merchants have upgraded to payment terminals that accept them. Add in the fact that chip cards a more expensive to produce, and you wind up with three parties (consumers, merchants and issuers) who haven’t been in a big hurry to make the switch.
Those attitudes could change, though, now that millions of consumers have had to have their compromised magnetic stripe cards replaced in the wake of the breach.
How EMV works EMV cards thwart some of the most common ways thieves clone cards and steal data. They come equipped with a microprocessor chip that encodes the information transferred to the merchant, such as account numbers, differently with each transaction. So, even if thieves manage to get data from a merchant, it’s like stealing an expired password — useless. EMV chips are also tougher to clone than magnetic stripes are.
While EMV technology won’t make data theft disappear (several successful breaches overseas are a testament to that), it does up the ante for thieves, making their job harder.
The EMV cards being rolled out stateside are a bit different than those rolled out in other countries. The U.S. cards use what’s called “chip and signature” technology, while the EMV cards being issued overseas generally use “chip and PIN” technology. The chip and PIN cards require the cardholder to type in a PIN to complete a transaction, making it difficult for a thief who gets ahold of the card to use it. Although chip and signature cards still have the more-secure computer chip, they require a signature for the transaction, rather than a PIN.
