When a magstripe card is stolen, the thief can immediately use it to make unauthorized transactions, then discard it with little risk of detection. Traditional magstripe credit cards are encoded with static payment information. Whatever it’s called, here’s how EMV technology works. The EMV standard is backed and controlled by EMVCo, an equitable consortium consisting of Discover, American Express, MasterCard, Visa, JCB, and China UnionPay.Īccording to, other common names for EMV credit cards include: The modern version of EMV is now a global industry standard used by most major credit card issuers and networks, including (importantly for U.S. EMV Credit Card Technology – How It Works and How to Use ItĮMV stands for “Europay, MasterCard, and Visa.” The technology is named for the three credit card networks that originally developed the protocol. This is what you need to know about EMV (chip) credit card technology’s functionality, history, benefits, and special use cases. And there are some other important reasons for merchants and consumers to adopt EMV technology, from global acceptance, to greater flexibility in low-connectivity environments. Therefore, EMV technology won’t completely eliminate credit card theft or large-scale data breaches. credit card fraud rates have actually increased in recent years as issuers in other countries switched to more secure EMV cards.Ĭybersecurity is an arms race, and the incentives to steal financial information are as powerful as they are undeniable. sees nearly 50% of global credit card theft losses. Despite accounting for just 21.4% of all credit card payments, the U.S. According to, the United States is arguably the credit card fraud epidemic’s global epicenter. The frequency of credit card fraud is staggering too. These breaches caused serious, lasting reputation problems for huge, respectable retailers like Target and Home Depot, not to mention untold mental pain for the regular Joes and Janes caught up in the turmoil. What was wrong with the old, magstripe-only credit cards? In a nutshell, they (and their issuers) were outmatched by cybercriminals whose increasingly sophisticated and brazen hacking techniques allowed them to steal credit card numbers with impunity, resulting in ever larger, ever more devastating data breaches that affected millions of consumers at a time. The new cards still have magnetic stripes (magstripes), just like the stripe-only versions they replaced, so they can be used at old-fashioned card readers that don’t support chip cards. But the cards’ issuers, as well as the credit card networks that facilitate billions of credit card transactions per day, believe that chip cards represent the future of plastic payment technology. You’ve probably received new cards in the mail too, complete with little circuit-like chips on the front face. Whether you’re a habitual credit card user whose wallet is stuffed with plastic, or a judicious spender who keeps a single, lonely square on hand for emergencies only, you’ve probably received correspondence from your issuers about the switch to EMV (chip) technology. Or maybe you use a travel rewards credit card to earn points or miles that can be redeemed for free or reduced-cost flights, hotel stays, or car rentals. Do you use credit cards regularly? Perhaps you have a favorite cash back rewards credit card that offers a small but meaningful return on every dollar you spend.
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