In the year since the first major issuer debuted an EMV credit card for U.S. consumers, a handful of national banks and credit unions have rolled out their own versions. These credit cards, outfitted with microchips for better security and widely used abroad, aren’t exactly taking the country by storm.
Who needs an EMV credit card?
But the spate of new offerings raises interesting questions for those who have lived EMV-free so far: Who should get an EMV credit card, and how would someone get one?
More than 1.34 billion EMV cards dot the globe, according to EMVCo, the U.K.-based, industry-owned organization that manages the EMV chip standard. (EMV is an acronym for Europay, MasterCard and Visa — the developers of the standard.) But the U.S. rollout of chip cards has been slow; issuers mostly have offered cards with a magnetic strip.
But some U.S. travelers have discovered that merchants in Europe and Asia don’t always accept their chipless cards and that some mag-strip cards also have failed in some overseas ticket kiosks and other unmanned machines, says Randy Vanderhoof, executive director of Smart Card Alliance, a New Jersey-based nonprofit that promotes smart card technology. That can cause inconvenience and frustration for travelers.
While nobody necessarily needs an EMV credit card because cards that operate the traditional mag-strip way are still universally accepted, some travelers may find it more convenient to carry a chip card, says Stephanie Ericksen, head of global authentication product integration at Visa.
“Consumers who are traveling frequently, going outside the major cities to some smaller towns where there might not be as many international travelers, might be a little more interested in having a chip card, so their acceptance experience when they travel abroad is more smooth,” she says.
The other EMV selling point for consumers, issuers and merchants alike is enhanced security. The EMV technology makes it much harder for criminals to copy a useable chip card, Ericksen says.
Who issues EMV credit cards?
Most U.S. EMV credit cards so far have been handed out to well-heeled customers who are known to travel abroad based on their card purchases or possession of a travel rewards card, Vanderhoof says. Many of these cards also are corporate cards intended for business travelers. These cards have a mag strip in addition to the chip, so they can be used stateside as well as overseas.
Wells Fargo and Chase started the chip-card trend in the U.S. last April. Since then, the list of financial institutions that issue EMV debit and credit cards — Vanderhoof counts 19 in total — includes Bank of America, Citi, PNC Bank, U.S. Bank, the State Employees’ Credit Union in Raleigh, N.C., and, perhaps not surprisingly, the United Nations Federal Credit Union in Long Island City, N.Y.
Neither American Express nor Discover issues EMV credit cards in the U.S., but Vanderhoof thinks that might change because, in his view, no issuer would want to be perceived as supporting less security.
How to get an EMV card
Consumers who have a card that’s being issued with chip technology might be able to obtain a chip card simply by asking for it. Those who don’t have a card that’s offered with a chip can apply for such a card in the usual fashion.
Consumers might want to ask specifically for a “chip-enabled” or “EMV” card. Otherwise, as Vanderhoof says, “all banks are going to tell you their cards will work internationally.”
But make sure to check the credit card’s features before applying.
“Customers who want a card for international travel purposes might be able to qualify for that card, but they might lose some other features, such as cash back or rewards, that they have on their existing card,” he says. “It’s up to the individual financial institutions how they package the other capabilities.”
The future of EMV
Though chip cards are new in the U.S., the technology has been around for 15 years internationally, according to Visa’s Ericksen.
One reason for the slow U.S. adoption has been cost, says Michael Misasi, a research analyst for Mercator Advisory Group’s credit advisory service and author of a recent report about global chip-card adoption.
Card issuers haven’t been eager to foot the bill for the more expensive technology, especially since few U.S. merchants are equipped to accept chip cards, he says.
But he expects the changeover to accelerate now that Visa and MasterCard, the two largest credit card payment processors, have announced carrot-and-stick initiatives to encourage issuers and merchants to accept EMV credit cards. Discover just recently introduced an adoption effort, too. One stick: Issuers and merchants that don’t adopt EMV credit card technology could be stuck with the liability from fraud committed with mag-strip cards.
“The liability shift doesn’t take effect until 2015,” Misasi says, “so it’s going to take years, but it’s not likely to be derailed.”