September 2014: Did your credit card company send you a new card with a silver square on it? If so, consider yourself lucky! The square is called an EMV chip and it makes your card much safer to use.
EMV chips have been used in Europe since 1992 — they’re considered the gold standard in credit card technology. More than a billion of these smart cards are being used around the world right now. Us frogs love them and here’s why you will, too:
What is an EMV chip?
It’s a microchip that stores and protects data (technically, it’s called an integrated circuit card). It’s named after the developers — Europay, MasterCard and Visa — and it’s also called a smart card, chip card, chip-and-PIN card or IC credit card. If you have one, it’s probably a dual card, which means it has the EMV chip in addition to a magnetic stripe. That’s because only about 10% of U.S. businesses currently have devices that read EMV chips.
How does a chip card protect me?
In four different ways:
1. It (usually) requires you to enter a PIN instead of a signature when checking out. This is your second factor in two-factor authentication, or making sure you’re really you. The first factor is the actual card.
2. It makes it more difficult to skim data with a reading device. Magnetic stripes are notoriously easy to skim.
3. It prevents criminals from making fake cards with skimmed or stolen data. Point-of-sale devices that read EMV chips use a sophisticated dynamic verification process instead of just reading the static data on a magnetic stripe.
4. It makes it harder for criminals to piece together information because transaction information is encoded in a unique way each time you use your card.
How do I use it?
Instead of swiping, you insert the card into a chip reader and leave it there during the entire transaction. The terminal will prompt you to enter your PIN on a keypad or to sign the receipt.
Does the EMV chip protect my online purchases?
No, sorry. And it doesn’t make retailers who store your credit card information any more secure either.
I haven’t gotten a new card yet — when will I get mine?
Soon, hopefully. Citi, Chase and American Express are current leaders, and retailers (like Sam’s Club) and credit unions that issue credit cards have seen the EMV light, too. As more retailers migrate to the safer EMV terminal system, the retailers that lag behind will become even more vulnerable. As part of a smaller non-EMV pond, they’ll be popular with cybercriminals, so keep that in mind as you hop from store to store!
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