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Get ready for EMV credit cards

By Janna Herron · Bankrate.com
Wednesday, August 10, 2011
Posted: 2 pm ET

Visa is raising its stakes on chip-and-PIN credit cards.

The company on Tuesday launched a multi-pronged initiative to expand the use and acceptance of EMV-enabled credit cards in the U.S.

Visa said it's offering certain incentives if retailers swap out their old-school payment systems with ones that take these cards. EMV is an acronym for Europay, MasterCard and Visa, the developers of the technology. Commonly used in Europe, EMV cards use a microchip to authorize a transaction instead of the traditional signature.

The company will waive the retailer's fee to validate their compliance with an industry security standard each year if at least three-fourths of their transactions come from Visa EMV transactions.

Visa isn't stopping there. It's imposing deadlines, too. It will require companies that process Visa transactions and set up Visa relationships with retailers to support EMV cards by April 2013. And those retailers that don't accept EMV cards (excluding online, or card-not-present, transactions) by October 2015 will also take on the fraud liability, Visa said.

So why should you care?

For one, EMV provides better security protection because the chip inside the card encrypts transaction information. Oftentimes, it's a one-time encryption, so every transaction gets its own unique data. That makes it harder for thieves to steal your information and then use it for another purchase.

The magnetic stripe, on the other hand, is considered "static," says Randy Vanderhoof, executive director of the Smart Card Alliance, a nonprofit focused on helping to adopt smart card technology.

That means it's easy to pick up the information on the strip and use it over and over for multiple transactions.

Second, EMV is commonly used outside the U.S. So if you're a globetrotter, especially to Europe, you'll find you can use your EMV-enabled cards at more places, such as train station kiosks and vending machines.

Several card issuers have seen this movement coming. U.S. Bank, Chase, Wells Fargo and several credit unions, among others, have recently introduced EMV-enabled credit cards.

What about you: Do you want an EMV credit card? Why or why not?

Follow me on Twitter: @JannaHerron

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9 Comments
Suki
September 01, 2011 at 12:37 am

I have this card and it's sucks !! I can't use it in state

Dan, Union City CA
August 16, 2011 at 5:05 pm

EMV makes it almost impossible for scammers to use your card or make duplicates. It electronically guarantees the card is the original, not a duplicate, and (when a PIN is also required) further ensures that the account holder is present. But you still need to watch who has possession of the card and monitor transactions because it is still possible to perform online transactions with a copy. You also need to be careful that the scammer does not charge additional items during the authorized transaction; for example, charging $50 movie tickets and a tri-tip roast and pocketing them for him/herself. [I'm a computer security specialist for a large global networking company.]

Janna Herron
August 11, 2011 at 4:25 pm

@Bruce: I would call your issuer to see if the company offers any EMV-enabled cards. Visa's announcement is aimed at incentivizing retailers and those who work with retailers in the payment process, rather than the issuers.

Debra James
August 11, 2011 at 3:28 pm

@Freddy, when is the last time that you tried to spend U.S. currency in Europe or to make an online purchse? They don't accept it; you have to use a credit or debit card. There's nothing wrong with cash just as long as you are close to your bank to get it when you need to spend the money. If not, it's much more convenient and safer to use a credit card.

Alvin
August 11, 2011 at 11:06 am

It is about time. This could be a little expensive for the larger banks - of course the cost will be passed on. Question is will the banks upgrade the ATM/debit cards in the U.S.?

That is one less thing for Americans to worry about when traveling to Europe. I have heard it can be a little inconvenient to have the old magnetic strip credit cards in some countries.

Bruce
August 11, 2011 at 10:47 am

So how do I get one of these cards if I want one? Call the issuer?

John G.
August 10, 2011 at 10:52 pm

Second-generation contactless technology can include EMV compliance. U.S. Bank has announced a Visa Signature card that supports both technologies. Perhaps the combination of features will have critical mass when either by itself would not.

Freddy
August 10, 2011 at 2:39 pm

They have tried these cards here in the United \kingdom & they do not work. what is wrong with "CASH" and not this paper rubbish that the Fed keeps printing !!!!