What is the EMV Chip Card Technology?
In the last year, many U.S. banks have replaced or are in the process of replacing millions of old magnetic strip credit and debit cards with new cards equipped with computer chips that store account data more securely.
MasterCard and Visa wanted to minimize counterfeit fraud by switching to the EMV chip. Counterfeit fraud happens when someone steals the information off the magnetic strip when you swipe the card and then reproduce it on another card. According to a 2014 report by Aite Group, counterfeit fraud accounts for 37 percent of all U.S. credit card fraud.
This switch to EMV chip cards is a massive undertaking. Tens of thousands of individual merchants will need to upgrade their equipment to allow for chip transactions instead of swipe cards. MasterCard and Visa decided that after last October whichever entity had the lesser technology, either the retailer or the bank, would be responsible in the event of a hack.
Your Card Has Probably Been Updated
As of earlier this Spring, MasterCard provided an update on how its cardholders, partners and customers are adopting the EMV chip card. More than two-thirds (67 percent) of U.S. issued MasterCard credit cards now feature chips. Consumers can now use their chips in more places as 1.2 million U.S. merchant locations are now accepting chip card payments. In addition, one million local and regional merchant locations are accepting chip cards. In 2015, the Payments Security Task Force projected that 98 percent of cards issued in the U.S. would feature chip technology by the end of 2017. The U.S. is the last major market that still is using the magnetic-stripe card system. Many European countries switched to the EMV card years ago as a way to minimize fraud. Since the U.S. was slow to adopt to the EMV card, European card numbers sold for 5x the price of U.S. cards on the dark web.
Am I Completely Secure Now?
EMV cards are more secure than the magnetic strip cards, but EMV cards alone will not solve cybercrime. Card fraud will most likely drop with the implementation of EMV cards; however, fraud-transactions by phone or online are expected to increase. Neither a PIN nor a signature is required when customers use their cards online, so simply stealing card numbers is sufficient for hackers to use for such attacks. Retailers and other businesses could start requiring cardholders to provide the three-digit security code, the CVV, when making online purchases. Hackers, however, can gather this information through phishing attacks or installing malware.
What to Do Next?
If you have not received your EMV card yet, it’s time to reach out to your local bank for information and access to this chip technology. Please reach out to our security experts if you have additional concerns or questions.