In the last few years, it seems like there are more and more cases of major credit card fraud. To reduce the risk of fraud and identity theft, three major credit card companies are moving forward in the US with a chipped credit card in October. Find out how this will affect you.
Consumer Questions About EMV & Fraud Protection Answered
There are many ways to fall victim to identity theft, including having your credit card information stolen. The chipped EMV cards aim to reduce that risk with different technology than their magnetic stripe counterpart. Talking Cents is here to answer your questions about EMV credit cards.
What does EMV stand for?
EMV stands for the names of the three companies behind the chipped cards: Europay, Mastercard and Visa.
Is this a new invention?
Encrypted chip credit cards are not new- most of the world uses them outside of the US. The US still uses cards with the magnetic stripe that can get skimmed by scammers.
How do EMV cards help to reduce fraud?
EMV cards are better at protecting against credit card fraud than those cards with a magnetic stripe. NerdWallet explains the benefits:
- Authentication: EMV uses a mechanism to determine that the card belongs to the cardholder.
- Verification: The issuer can verify an EMV card using a PIN or signature for security, or if the transaction is below a certain amount, no verification method is necessary. This amount will vary based on the card brand, card issuer and merchant.
- Authorization: The issuer can assure cardholders that their cards will be authorized when the terminal can’t be contacted with EMV technology.
What does it mean for me when I use my card? Will I need a new card?
If you want to have a more secure transaction, you will need a new card. If the merchant does not accept EMV cards, don’t worry. The cards are being made with the magnetic stripe as well since it’s not required by law to only accept one form or the other. You don’t need to rush out and request a new EMV card; some issuers are not releasing them yet and not all merchants accept them.
How do I use an EMV card vs my current credit card?
Instead of swiping the card, you will simply insert the card into the reader. The card remains there until the transaction is complete. Don’t forget to take your card out when it’s over!
Do all businesses have to change in October?
No. Businesses are not legally required to change systems to accept the EMV chipped credit cards. However, merchants without the technology will now be responsible for the liability of any fraud or identity theft that occurs rather than the issuing credit card company.
Identity theft is a serious threat to everyone. To learn more about fraud and identity theft or if you have been a victim, visit ACCC’s Identity Theft section of the website.