Monthly Archives: January 2016

EMV Chips – What They Mean To You

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Whether you are a merchant, a consumer or both, EMV chip technology is great news. Also known as smart chip technology, EMV is a global payment standard designed to reduce fraudulent transactions where payment cards are physically present at the time of the transaction.

EuroPay, MasterCard® and Visa® (thus the abbreviation EMV) developed the EMV chip technology to combat counterfeit card fraud. Outside the U.S., more than 130 countries in Asia, Europe and South America, as well as Canada and Mexico, have already embraced the technology, and counterfeit credit card fraud has declined noticeably in those countries.

Here in the U.S., credit cards enabled with an EMV chip are gradually replacing their magnetic strip ancestors. If your payment card has a chip, you will see a small metallic square on the front of the card. Cards still have magnetic strips, too, so that you can use them at merchants that don’t yet accept chip cards.

The difference between EMV cards and the traditional magnetic strip cards is that the EMV chip better protects against unauthorized use by generating a unique number for each sales transaction. The magnetic strips on traditional cards contain unchanging data. When an EMV card is used for payment, the card chip creates a unique transaction code that cannot be used again. If a counterfeiter steals the chip information from one specific point of sale, typical card duplication would not work because the stolen transaction number created in that instance wouldn’t be usable again, and the card would be denied. Therefore, even if card data and the one-time code are stolen, the information can’t be used to create a counterfeit card.

EMV cards can be used at stores or at ATMs. The readers may differ, but each includes a slot in which to insert the card – with the EMV chip facing up. Directions on the screen instruct the user about what to do next. Generally, the chip card stays in the machine until the transaction is complete. If your card has an EMV chip and you attempt to swipe the magnetic strip instead, an error will appear and you will be prompted to insert the card for chip processing instead.

Credit and debit card providers are now rolling out the EMV chip cards, providing customers with an extra layer of security and confidence. The Biltmore Bank of Arizona card holders can expect to receive their new cards in the next few months. In the meantime, card holders can continue to use their magnetic strip cards at stores and ATMs.

For merchants, EMV software-equipped terminals offer the most secure way to accept in-store payments and reduce fraud liability risk, especially since the liability shifted to merchants on October 1, 2015 in the event that fraud occurs on a chip card presented in-store and chip card terminals weren’t used.

Additional information about EMV chip technology can be found here.↗

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