When an ECCU member was told by two retailers that debit cards would be obsolete as of October 1, they went to ECCU’s Facebook page to get the scoop. Because the nation was switching to the chip card, this member was told that there would be “no more swiping cards,” and wondered if that was really true.
Well…yes and no. What the retailers were referring to was the nationwide shift to EMV credit card technology. It has different implications for different people (consumers vs. retailers or merchants, for example). Because that can make things a little confusing, we felt it was important to shed some more light on what EMV card technology was, and most importantly, how it affects you.
What are EMV Credit Cards?
EMV (Europay, MasterCard and Visa) credit cards contain small, metallic computer chips that authenticate transactions. The chips will eventually replace the black magnetic strips (often referred to as mag stripes) on the back of current cards, making swiping your card a thing of the past.
The key term here is eventually….both EMV cards and the traditional mag stripe cards that we’re all used to will be around simultaneously for quite some time. In fact, there’s not even a chip mandate at this time, and merchants will continue accepting traditional cards for the foreseeable future.
How does this affect me?
- Current cards still work normally. Magnetic stripe cards aren’t going away anytime soon, so even if a merchant can accept EMV cards, you can still use your traditional card virtually everywhere.
- Outstanding fraud protection. The likelihood of fraudulent transactions against your account will be incredibly rare with chip technology.
- Your card will look different. Currently, most traditional magnetic stripe cards have raised numbers on the front. EMV cards will be flat, and will contain a metallic chip on the front.
- Dip, not swipe. Instead of a vertical swipe that we’re used to, EMV card readers require you to “dip” your card. This simply means inserting your card into the reader, where it remains until your transaction is complete.
Why the nationwide shift to chip credit cards?
Contrary to what some conspiracy theorists may believe, it is not a way to spy on your financial data. Conversely, chip card technology provides consumers with greater protection against counterfeit card fraud.
Here’s how: traditional magnetic stripe cards store your unchanging data, including your most sensitive card and personal information. When thieves use card skimmers or obtain card data some other way (e.g. data breaches), they can create counterfeit cards and/or make fraudulent transactions on your behalf.
With EMV credit cards, the chips do not store data. Instead, a different data code is created each time it’s used to make a payment. More importantly, the code has a one-time-only use.
What was the October deadline all about?
Here’s where it got a little confusing: the October 2015 deadline that our member was informed of applied only to merchants and card issuers and their upcoming shift in fraud liability.
In other words, if a fraudulent transaction was made before October 1, the liability was the card processor’s responsibility. Now that it’s after October 1, the liability will fall back on the merchant who is not prepared with fraud-blocking EMV technology.
When will the transition to EMV technology be complete?
Because it’s a huge and costly undertaking, it will be a few years before the switch to EMV cards is 100% finished. It makes sense when you think about it: merchants and retailers need to purchase, install and learn how to use EMV-friendly payment terminals. Card issuers need to print new cards for all of their cardholders. And as we mentioned above, since there’s not a mandate in effect, there’s no sense of urgency despite the liability shift.
When will ECCU issue EMV cards?
We’ll issue EMV chip cards in 2016, though we do not yet have an exact date.
Hopefully this provides a better understanding of EMV chip card technology and its benefits. Are there any questions you still have on EMV cards? Leave a comment and we’ll answer it for you!
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