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US warms up to EMV credit cards

How consumers would benefit

Consumer liability for fraud is low as it is, says Linda Sherry, director of national priorities at watchdog group Consumer Action.

"One can theorize that if this cuts fraud costs for the payment networks, it would eventually cut costs for consumers," Sherry says. "But such trickle-down theories often don't work that way because the savings aren't passed on to consumers in a transparent way they can understand."

Aside from security concerns, EMV advocates bring up the issue of convenience. Some U.S. travelers have been shut out of transactions abroad because retailers simply don't take their mag-stripe cards. Train station kiosks are notorious for this hassle. As Latin American, African and Oceanic countries embrace EMV, more American consumers will be faced with this aggravation.

EMV push in the US

This year, some U.S. issuers tried to mitigate that annoyance for overseas travelers. Here is a list of credit card issuers that have recently introduced EMV-enabled cards:

  • U.S. Bank's FlexPerks Travel Rewards Visa credit card.
  • Citi's Corporate Chip and PIN credit card.
  • Chase's J.P. Morgan Select Visa Signature credit card.
  • Chase's J.P. Morgan Palladium credit card.
  • Wells Fargo's Visa Smart Card (credit card pilot program).
  • North Carolina-based State Employees' Credit Union EMV debit cards.
  • The United Nations Federal Credit Union chip and PIN credit cards.

Most of these smart cards are dual-functioning and feature the microprocessor chip along with the traditional magnetic stripe, so they can be used inside and outside the U.S.

As more issuers roll out EMV-enabled cards, Vanderhoof expects they will differ somewhat from their foreign counterparts. Some may be able to support contactless payment, such as U.S. Bank's card, while others might not employ a personal identification number to verify the cardholder, he says.

Despite those potential subtle differences, the EMV stage is set for the U.S. For its part, Visa has set deadlines on retailers to accept EMV-enabled cards over the next four years or take on the fraud risk. And MasterCard has given U.S. ATM owners less than two years to upgrade their machines or assume certain liabilities.

So who knows? Soon, swiping a credit card and signing a receipt may seem passe.

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