The credit card company said Monday it's offering U.S. retailers and ATM owners a road map to make their point-of-sale terminals and cash machines EMV-friendly by April 2013. The company was vague on details, but it did say it will provide "true financial benefits" to help merchants make the switch.
EMV-enabled cards contain an embedded microprocessor chip that uniquely encodes transaction data each time it's used. This makes it much harder for thieves to steal and clone credit cards. The name comes from the developers of the technology -- Europay, MasterCard and Visa.
These cards are widely used in Europe and are fast becoming the worldwide standard as Asia, the Middle East and Latin America adopt the card technology. Americans still carry the traditional magnetic stripe card, which is more vulnerable to counterfeit fraud. U.S. cardholders also may find their old-school cards won't work at unmanned kiosks, gas stations and toll booths abroad.
(A key point: Some of these cards require a personal identification code to complete a transaction, but not all. Those cards are called chip and PIN cards and the name is sometimes, though wrongly, used interchangeably with EMV, even by your favorite credit card expert.)
Now, you may remember last August Visa unveiled a carrot-and-stick approach to getting merchants to change their machines.
It offered to waive a security standard fee if merchants could show that at least three-quarters of transactions come from EMV Visa transactions. It also will require companies that process Visa transactions and that set up Visa relationships with retailers to support EMV cards by April 2013. And if retailers don't upgrade their terminals by October 2015, Visa will not take on any fraud liability. (Gas stations have until October 2017.)
Many U.S. issuers are getting on board, too. Major banks such as Bank of America, Chase, Citi, U.S. Bank, Wells Fargo and PNC have added EMV chips to existing cards in the last year, mostly to corporate cards or cards geared toward international travelers.
Seems like we're heading into an interesting year as the April 2013 deadline set by Visa and MasterCard looms. Do you think the card landscape will switch to EMV? Would you care?
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