Friday, September 11, 2015

Have You Received Your New Credit Card Yet!

Have you received a replacement credit card that looks a little different?  I received mine a couple of weeks ago.  You will notice a computer chip on it.  This is part of the new nationwide shift to EMV

EMV -- which stands for Europay, MasterCard and Visa -- is a global standard for cards equipped with computer chips and the technology used to authenticate chip-card transactions. In the wake of numerous large-scale data breaches and increasing rates of counterfeit card fraud, U.S. card issuers are migrating to this new technology to protect consumers and reduce the costs of fraud.  Europe has already successfully transferred to EMV cards.

The shift goes into effect in October 2015, but will take many months to complete.  Businesses will need to get new credit card machines that reads and transfers data differently.  During the transition time period, credit cards will have both the magnetic strip and the computer chip, so they can work in the machine that the business has.

For merchants and financial institutions, the switch to EMV means adding new in-store technology and internal processing systems, and complying with new liability rules.  For consumers, it means activating new cards and learning new payment processes.

Unlike magnetic-stripe cards, every time an EMV card is used for payment, the card chip creates a unique transaction code that cannot be used again.  If a hacker stole the chip information from one specific point of sale, typical card duplication would never work because the stolen transaction number created in that instance wouldn't be usable again and the card would just get denied.

Just like magnetic-stripe cards, EMV cards are processed for payment in two steps: card reading and transaction verification.  However, with EMV cards you no longer have to master a quick, fluid card swipe in the right direction. Chip cards are read in a different way.   Instead of going to a register and swiping your card, you are going to do what is called 'card dipping' instead, which means inserting your card into a terminal slot and waiting for it to process.

When an EMV card is dipped into the machine, data flows between the card chip and the issuing financial institution to verify the card's legitimacy and create the unique transaction data. This process isn't as quick as a magnetic-stripe swipe.  In addition, the card issuing company may require you to type in a pin number even if you are using the card as a credit card and not a debit card.

Be prepared when you go shopping, if the company sent you a letter with a pin number prior to receiving your credit card memorize it.  You will be asked to enter it after you dip your card in the machine.  I was caught off guard when making a recent purchase and did not know my pin, slowing up the check out line.

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