EMV Credit Cards

The credit card industry in the United States is starting to adopt the EMV chip technology for credit cards in lieu of the less secure magnetic stripe technology that has been used since the birth of credit cards.   EMV is short for Europay, MasterCard and Visa.  The EMV technology uses a small computer chip in a credit card to securely process transactions at an EMV enabled credit card register. The adoption of the EMV technology and processes will be mandatory in October 2015.

What does the EMV do for us?  EMV provides a more secure way to process credit card transactions.  Transactions are processed in a way that protects data and eliminates any potential for the transaction data to be used to create a new transaction.

EMV also prevents counterfeit fraud, a process where the magnetic strip on a credit card is (covertly) copied and duplicated onto a new card.  The counterfeit card has your credit card number and magnetic stripe information.  Purchases made with the counterfeit card are billed to you. 

It's important to remember that many of our new credit cards with the EMV chip still have a magnetic stripe.  For that reason it's important to watch the salesperson complete your transaction (especially important in restaurants where transactions are generally done away from your table).  In addition, monitor your credit card transactions regularly.

What the EMV card can't do is prevent all types of credit card fraud.  The fraud it can't eliminate is the ability for someone other than you from using your credit card online in what is known as a  card-not-present (CNP) transaction.   CNP transactions are electronic transactions usually completed online (with an etailer, or electronic retailer) but they can also come from a transaction that you (or someone authorizes via telephone.  For this reason it is very important that each of us physically protect our credit card(s), credit card statements and any records containing credit card data.

Both credit cards and (modern) passports have electronic chips in them. These chips are similar but not the same.  The chip on our credit card is only readable by a specific smartcard reader.  This lessens the likelihood that our card data be captured by a hacker, however note that it's not impossible.  In my opinion, it makes sense to add protection to make it impossible to read the data.  Add a small sheet of aluminum foil in your wallet or billfold to shield your EMV chip card from an electronic reading device.

Are you concerned about the protection of your card?  What are you doing to protect our financial privacy?