How EMV®¹ Smart Chip Credit Cards Are Helping To Improve Security For The Everyday Consumer

The article content is provided with our sponsor, Bank of America Merchant Services.

U.S. card issuers and merchants are switching over to a new, more secure payment card processing system called EMV (EuroPay, MasterCard® and Visa®); known as “chip” card technology. Here are some things you need to know about EMV.

What is EMV?

EMV is a card technology that uses a smart chip to authenticate in-person credit and debit card transactions. With our current system, you swipe your card’s magnetic stripe through a card reader and then you enter a PIN, or leave a signature, to complete the transaction. The new system requires that you insert your card into a reader — often referred to as “dipping” — the chip performs cryptographic processing which provides a unique code for each transaction, preventing the data from being fraudulently reused. After entering your PIN or leaving your signature, the transaction will be processed and you can retrieve your card.

How is this new system more secure than the old one?

Because an EMV smart chip generates a unique encrypted code with every new transaction, thieves will no longer be able to commit point-of-sale fraud using a cloned payment card, in the same way they do today. This is because in-person purchases made with EMV-secured cards will be declined if a unique smart chip code is not generated. As Bank of America Merchant Services’ EMV white paper points out, the system has been used in Europe since the 1990s and is now used in 95 percent of all point-of-sale terminals in Western Europe. As an example of how effective EMV is, the United Kingdom saw a 34 percent drop in physical payment card fraud in the six years following the system’s introduction.

Why is EMV being adopted in the U.S. now?

As countries in Africa, Asia, Australia, Europe and South America have implemented the EMV system, incidences of credit card fraud have skyrocketed in the U.S. According to a recent article on Business Insider², the U.S. lost $14 billion to payment card fraud in 2013, which is a 29 percent increase from 2012. Since the U.S. has become responsible for 51 percent of all global payment card fraud, issuers Visa®, MasterCard®, Discover® and American Express® instituted the liability shift. Now, banks and merchants not using the EMV system are liable for fraudulent card transactions. As such, Bank of America®, Citigroup®, JPMorgan® Chase® and Wells Fargo® are issuing EMV chip cards to their customers. Conversely, conscientious retailers will begin integrating EMV readers into their point-of-sale systems.

How will this change affect my everyday purchasing?

It largely won’t. As noted above, you have to insert your card into an EMV reader instead of swiping it, so remember to retrieve your card once the transaction is complete. Many banks are now or will soon be issuing smart chip-equipped cards, so you don’t need to request one. Major retailers, such as Kroger®, Target® and Walmart®, already have EMV readers in their stores. If you do business or vacation in internationally, you won’t have to worry about your EMV card being turned away by fraud-averse retailers. Note: EMV cards will also have a magnetic stripe to allow acceptance at merchant locations that are not yet equipped with the special devices that are required to read the chip.


To learn more about the EMV change and how it affects your business, visit or contact a Bank of America Merchant Services business consultant.

¹EMV is a registered trademark in the U.S. and other countries, and an unregistered trademark elsewhere. EMV® is a registered trademark owned by EMVCo LLC.

²Business Insider:



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