What You Actually Need to Know about EMV Chip Cards

You might have seen them in the news. Or maybe you know someone who has one. Or maybe you even heard about the impending “liability shift” . . . dun dun dun . . . Or maybe you haven’t ever heard of EMV Chip Cards until now. Whatever you have or haven’t heard, chip cards are the next big thing in financial technology. And in the next year or so, everyone will have one, including you! So here are the basics you need to know about what they are and how they work.

  • What is an EMV chip card? 

EMV stands for Europay Mastercard Visa. That acronym is pretty unhelpful, though, in terms of figuring out what the card does. What you really need to know is that EMV is a type of chip that will soon be embedded in all debit and credit cards. The chip encrypts your card information, like your card number, cardholder name, CVV2 (that 3 digit number on the back), and expiration date. When you insert a chip card a merchant’s terminal, instead of getting all that info off your card like they do with an old fashioned magstripe card, all the terminal gets is an encrypted code. The terminal never captures your personal info. Plus those encrypted codes are good for one-time use only, so they can’t be stolen and used again. So basically an EMV card is just like the card you have now, except smarter and more secure.

  • What’s the benefit of having a chip card?

It’s safer than your old card! Fraud is greatly decreased by the chip because of how it encrypts your information. So when you have a chip card you are less vulnerable to fraudulent charges on your account. Plus, a lot of other countries have already been using EMV chip technology for years, so chip cards are handy for those who travel abroad frequently.
EMV Better

  • How do I use a chip card? Will I still be able to use my old card if I don’t have a chip card yet?

Using a chip card is super simple. When you’re at a chip terminal, you’ll stick your card into the bottom of it. The card will stay there while you process the transaction as usual. Then you remove your card and you’re on your way. Every chip card will still have a magstripe on it, so if you’re ever at a terminal that’s not chip-friendly, you’ll still be able to swipe your card the old fashioned way. Conversely, if you don’t have a chip card yet you can still swipe your magstripe card at a chip terminal. And best of all, if you have a shiny new chip card but you accidentally swipe it at a chip-enabled terminal, the terminal will remind you that you have a chip card and you need to insert it instead.

  • What’s this “liability shift” on October 1st all about?

This sounds a lot more ominous than it is, I promise. When it comes to debit and credit cards, liability is all about who is responsible for fraudulent transactions. The good news for consumers is that with or without a chip card, you’re never liable for transactions you didn’t do. So really, you can ignore the whole liability shift thing, and continue to use your card knowing you won’t be responsible for any fraudulent charges.

  • What about online transactions?

Chip cards only affect card-present transactions, or transactions where you are there in person to insert your chip card. Online transactions aren’t affected by chip cards, because you’re manually inputting your card info into the computer, not inserting a chip or swiping a magstripe. So you’ll process online transactions the same way you always do.

  • When will I get a chip card?

Probably soon! Again, there’s no rule stating that you have to have a chip card by a certain date. This means that financial institutions and credit card companies are issuing chip cards to their customers at their own pace. Chip cards and chip-enabled terminals are becoming more and more common around the US. You’ll see chip terminals at big chain stores like Wal-Mart, Target, and Hannaford. In response a lot of financial institutions are starting to issue chip cards to their customers. So be on the lookout for your new chip card soon, but in the meantime you can keep on swiping your old card with no worries.