At the beginning of 2017 we offered a blog titled Implementing EMV. This global standard for credit card payments based on chip card technology takes its name from its developers—Europay, MasterCard, and Visa. Finally, the sweeping move to EMV credit card technology has begun in the United States. The number of Visa chip cards in the U.S. has increased by 182% since October 2015.
To summarize this technology, the chip in the card encrypts information by offering something called a data dynamic. Think of this dynamic as a one-time use password that is created to protect each transaction at the terminal. The ability of this smart card to generate each particular password per transaction is a key factor in EMV’s security, decreasing credit card fraud on card-present transactions. For merchants who have completed the chip upgrade, counterfeit fraud dollars dropped 58% in March 2017 compared to a year earlier.
As the chip card makes great strides to replace magnetic strips, we bare witness to the great conversion from old technology to new. Behavior patterns historically reveal that there tends to be a lag and a pinch of apprehension whenever the collective population is pressed to make a change. We have stretched across that hurdle and are headed into a breath of compliance. As with all things, though, regardless of their nature, there are two sides.
The upside of using EMV
- Highly secure in protecting consumer data versus the magnetic strip due to encrypted microprocessor chip.
- True. Chip cards are encrypted to offer a greater level of protection than ever before. What about privacy though? An older technology, Radio Frequency Identification (RFID), emits a radio frequency, continuously broadcasting your card’s location, whether in MacDonald’s or Wal-Mart, to your bank or other issuing organization.
- Good news…the computer chip in an EMV card does not use this technology at all. Invasion of privacy is no longer an issue with EMV technology. Bottom line, your EMV card’s computer chip does not transmit an RFID signal. Rest assured.
- New revenue outlets can be created through chip cards and smartphone payments via marketing strategies and loyalty programs that can be transmitted directly from the merchant to the card or device.
- 50% of U.S. storefronts now accept chip cards.
- Consumers are becoming familiar and more comfortable using this new technology of paying for goods and services.
- 62% of Visa credit and debit cards are chip cards.
Financial institutions, consumers, and merchants want their financial data secure and uncompromised, first and foremost. Feeling