With October right around the corner and the EMV deadline fast approaching, here's a quick refresher on the new credit card technology.
What is EMV?
EMV, or Europay, MasterCard and Visa, is a new type of credit card that replaces the traditional magnetic strip standard. Named for the three companies who created it, EMV cards have a chip embedded into the the card, which is more secure than the older cards. Information on the chip is encrypted, so, if hacked, the information that thieves obtain would not be useful to them.
EMV is the new global standard, and has been widely accepted for some time, but is only now making its way stateside.
What is the deadline?
Several years ago, MasterCard and Visa established a deadline of Oct. 1, 2015 for EMV implementation in the U.S. That was codified by President Barack Obama last year through an executive order. The deadline requires all credit card issuers to replace customer's old, magnetic strip credit card with newer, EMV ones.
What happens if I miss the deadline?
The deadline really doesn't affect consumers at all, other than having to learn how to use the new technology.
If you haven't received your new credit card, don't worry: you're not the only one. According to CBS News, 54 percent of American consumers are still waiting for their new cards. Banks are working to replace them, but many are likely to miss the deadline.
There is another important part of the deadline, which is retailers and other entities that accept the cards. They aren't mandated to do anything, but if they don't upgrade their POS credit card processing software and hardware to accept the new cards, liability in fraud cases will shift from the credit card issuer to the retailer.
Should retailers who haven't upgraded be avoided?
This question is more of a personal preference, but the fact of the matter is that EMV is more secure than old magnetic strip cards. Many company's are behind upgrading their systems, just like the banks, so you may encounter this after Oct. 1. Luckily, the new EMV cards will still be able to do both, so consumers will still be able to go to stores that haven't upgraded.
What happen's if there's fraudulent activity on my card?
Despite the added security, fraudulent charges may still happen. If so, there should be no change in how you should act. Call the issuer and report the charges immediately.
How are the new cards used?
With EMV cards, swiping will become a thing of the past. Card readers have to access the data on the chip, so you will now be dipping to pay for things.
Credit card readers will now have a slot in them with a picture instructing customers what direction to insert their cards. Many of these are already in stores, so you may have already seen these. Once you locate the slot, the dip the card into it, allowing the device to read the chip. Once processed you will still sign for the purchase, as usual.
How is this different from chip and PIN?
One of the controversies behind the U.S. implementation of EMV is the choice of chip and signature over chip and PIN. In most other countries, customers authorize their purchase by entering in a PIN, much like a debit card, rather than their signature. Customers in the U.S. may still receive PINs, but they will likely only be used when traveling abroad.
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