EMV Chip Technology vs. Magnetic Strip Technology
Traditional cards feature a magnetic stripe which contains the numbers associated with your account. At the point of sale, these cards are swiped across a credit card reader which then generates a code that is sent through the system or network to authenticate the transaction. Unfortunately, the same number is generated for each transaction which makes it easy to forge or steal data in case a fraudster hacks into the system. That is why the traditional system is vulnerable due to its static nature. On the other hand, the EMV chip technology is dynamic and very safe to use. The microprocessor chip generates a unique code for each purchase making it almost impossible to hack account information during payment. Instead of swiping, however, a method touted as card dipping is used which involves the customer sticking the card into the slot and the leave it there to approve the transaction. Therefore, though someone could try and steal data, it is useless to them as they cannot use it for another transaction.
How about Chip-and-PIN cards?
In Chip-and-PIN cards, data is more secure as a pin is used instead of a signature which may be forged. However, these cards work on both swipe and slot and if the retailer is not EMV enabled, your data is just as vulnerable as that of a magstripe card. The new card readers support both processes, and once you swipe, you are directed to insert the EMV card into the slot. Unfortunately, most financial institutions have stuck to the Chip-and-Sign card which only requires a signature for authentication. You can take it upon yourself to request for PIN inclusion from your card company. Not only is it more secure, but also enables you to use your card abroad. Just ensure that you do not forget your PIN!
Best Practices When Using EMV Chip Technology
Using EMV should not make drop your guard. Merchants having been given an incentive; of the carrot and stick nature, where if they have already complied and switched to EMV capable systems, they are not liable in case of card present a fraud. And if not, they shoulder the responsibility. Sadly, some have opted to take their chances, unwittingly inviting fraudsters to take a shot. Being vigilant when it comes to your retailer’s payment processing is crucial. Also, monitor your statement to detect any charges that you did not authorize as the EMV chip cards do nothing for online and telephone (Card Not Present) fraud. Fraudsters have turned to this and can use your card number to make such purchases. While there are still some dissenting voices and skepticism as to the ability of the EMV chip cards to reduce Card Present fraud, it is unanimous that they give fraudsters fewer avenues of copying and stealing personal account information as well as succeeding in counterfeiting. Consequently, you as a customer or merchant stand to gain from using EMV chip technology.