Swipe and sign credit card shopping is one of the great American traditions, and we’re all familiar with the three-step process of:
- Pulling out your plastic
- Swiping your card or watching the cashier glide it through the reader
- Signing your name on the dotted line
Today, a new retail trend is emerging — one that offers greater security and fraud protection. However, are you prepared for this departure from decades of swipe-and-sign shopping?
The Rise of EMV Credit Cards
Believe it or not, this "new retail trend" isn't really that "new." EMV chip-enabled credit cards have been around for nearly 20 years. Because of their advanced security features, they are already mandatory in almost every major market around the globe.
Only recently has widespread EMV adoption come to the United States.
Yet what are EMVs? More importantly, how do you actually use these more secure credit cards?
Using EMVs to Shop
Short for Europay, MasterCard and Visa, EMVs are credit cards that come with embedded security chips on the front and traditional magnetic stripes on the back.
In order to initiate a transaction, the card must be physically inserted (chip first) into an EMV-ready terminal. In most cases, it is the customer who inserts the credit card into the reader — not the cashier.
To complete the transaction, the customer either:
- Signs his/her name with Chip & Signature EMV cards (just like with traditional magnetic stripe cards).
- Enters a personal identification number with Chip & PIN EMV cards (just like with most debit cards).
Yet why break with tradition? What was wrong with the old way of swiping and signing?
First, EMVs are not a complete break:
- They still have 16-digit numbers on the front — for online shopping
- They still have magnetic stripes on the back — for older legacy terminals
However, when using EMV chip-enabled readers, you benefit from extra protection. Merchants cannot initiate a transaction unless the chip is physically present. Plus, unlike credit card numbers (which can be stolen) or magnetic stripes (which can be cloned), these security chips are extremely difficult to duplicate.
In retail markets that have fully embraced EMV technology, in-store credit card fraud has fallen dramatically. In fact, EMVs are so effective at preventing fraudulent activity that thieves are constantly looking for easier targets elsewhere, including:
- E-commerce stores. For online transactions, the physical security chips that come standard with EMVs offer little protection on the Web. Shoppers usually enter credit card numbers and expiration dates to complete their transactions.
- Stateside retailers who haven't adopted EMV technology. Although EMVs are mandatory in most major markets, they are still optional in the U.S. Merchants who don't upgrade their payment infrastructure are attractive targets for would-be criminals.
Should You Upgrade to EMV Credit Cards?
If your card issuer has EMV options, you should definitely consider upgrading to this more secure technology. There is usually no cost for making the change, and with chip-enabled plastic in your wallet, you’re more protected whenever you shop at your favorite retail stores.