Give Me 10 Minutes. I’ll Give You The Truth About EMV.

Undoubtedly you have heard about EMV technology for credit cards, but you may not know exactly what it is, what its functionality is, and how it’s so secure. Don’t worry, we have you covered. This blog post will tell you everything that you need to know about EMV, and probably more.

EMV stands for Europay, MasterCard and Visa; which are the three companies that developed the EMV initial specifications. According to EMV Connection, EMV chip cards have embedded microprocessors that help to provide powerful transaction security features that regular mag stripe credit cards cannot. EMV credit cards help to increase user security as well as reduce instances of fraud.

How Are EMV Cards So Secure?

There are a variety of reasons why EMV credit cards offer increased security:

1. The chip. According to Gemalto, a smart chip is literally a small computer that has its own data storage, processing power, and application software. The smart chip has a secure vault that holds unique keys that are unique to each card. This helps to protect your transactions.

2. There is a unique code for each transaction. Credit cards that have EMV chips create a unique code that is validated by your financial institution for every transaction that is made. This unique code cannot be re-used for other transactions. For instance, a scammer would not be able to purchase an item using a fake card with stolen data at an EMV terminal, because it would not generate the proper code needed to complete the transaction.

3. EMV credit cards have advanced cryptography. Gemalto advises that EMV security is based on strong cryptography. This strong cryptography is used to create the unique transaction codes that are needed to authenticate the card. So only a chip card that is personalized to the cardholder during manufacturing can create a valid transaction. EMV stores payment information in the chip, rather than on the mag stripe using issuer-specific keys. This means that it is nearly impossible to create a fake EMV card that can be used to make successful transactions.

4. Card holder verification. This helps to ensure that the person, who is trying to complete a transaction, is the owner of the card.

Is There Proof? The Proof Is In The Pudding.

You may want some form of proof that EMV chip cards have heightened security features. Here it is. According to EMV Connection, countries that have implemented EMV chip payments have reported a decline in credit card fraud. The UK Cards Association has advised that fraud on lost and stolen cards is at an all-time low. In addition, EMV Connection advises that losses at UK retailers has dropped by 67% since 2004, and lost and stolen card fraud declined by 58%  between 2004 and 2009. Canada has also seen similar results. The EMV Connection advises that losses from mag stripe skimmers in Canada dropped from CAD $142 million in 2009, all the way down to CAD $38.5 million in 2012.

EMV can be a hard product to completely understand, as it is a relatively new technology in the United States. There are some great resources available that can provide you with valid information regarding EMV chip technology. Just make sure that you are utilizing reputable sources. Some reputable sources include:

The Good News

All Launch FCU credit cards will soon be equipped with EMV chip technology, providing you with increased peace of mind. EMV cards are a little different to use in comparison to traditional mag stripe cards. In order to use an EMV chip card you:

1. Insert your card into a chip-compatible terminal. You will enter your card face up, and chip first so that the chip goes into the terminal.

2. Instead of swiping the card you will leave your card in the terminal during the entire transaction. This may seem unnecessary, but if you pull your card out before the transaction is completed, the transaction will fail and you will have to start over. Remember, each transaction generates a unique code. Leaving your card in the terminal allows for this code to be created.

3. Remove the card once the terminal advises that it is ok to do so. Sign or take your receipt as normal.

In the near future, your Launch FCU credit card will have an EMV chip, as well as the traditional mag stripe to use at merchants who have not yet adopted EMV compatible terminals. In the meantime, it is still safe to use your current Launch FCU credit card. Remember, regardless of what type of card you have, it is always a good idea to check your accounts frequently to make sure there are no unauthorized charges on your account, and to protect yourself by making sure that purchases you make online are on secured servers. In addition, make sure to always check for the presence of a skimmer at gas stations and ATMs, and to report any fraudulent activity on your account to your financial institution and credit card provider right away. There are still a large amount of merchants who do not have EMV compatible terminals, as this technology is relatively new to the US. So even if you have an EMV compatible card, you will have to swipe your card as usual at these merchants. For an idea of what a card with an EMV chip looks, click here. Keep an eye out for future blog posts, website articles, and emails for updates on EMV technology at Launch FCU.

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