This would make it four times more difficult to copy information - the counterfeiter would have to anticipate your next purchase and know the exact data formula your bank would give the store to complete the purchase in order to steal your information. If you make four purchases in a day, say a cappuccino, lunch, groceries, and gas, that’s four payments at different stores that all used different data to authorize your transactions. In order to decrypt data, you must have access to a secret key or password. This is kind of how chip readers work because a new set of data is attached to each purchase. Everyone is supposed to have a print unique to him or her. Second, the data changes with every purchase you make. First, the chip is a small bit of encrypted data. This allows counterfeiters to copy the information more easily and reproduce cards with the same magnetic stripe.ĮMV chip technology works in two ways to break this method of fraudulence. The magnetic stripe has permanent data in it that cannot change transaction to transaction.
Why does the stripe make your cards more susceptible to fraud? Because it doesn’t encrypt data like a chip reader. EMV chip technology was created with the purpose of decreasing the level of fraud that has been occurring nationwide with magnetic stripe-enabled credit cards. EMV chip technology is saferĪs we said, the transaction takes a few seconds longer, but that’s because it’s a more secure way of completing a payment. You then authenticate the payment with your PIN code, and your purchase is complete.
At the same time the code is being created, your payment is being verified.
The difference is that the data from the chip is transferred to your financial institution, where a code unique to that purchase will be created. Why does it take longer? When you dip a card, the payment has to process much like a card with a magnetic stripe. How much longer does it take? A couple of seconds - that’s all.
It’s supposed to be an upgrade right? Well, it is, and it’s more secure. In a world of speed and ease, the last thing we want to hear is that something new is going to take longer than the previous process. We’ve come up with five things you probably didn’t know about the new technology to help you understand how exactly they work. is still going through the switch from magnetic stripe credit cards to chip reader credit cards, you may have some lingering questions about EMV chip technology and all that entails. Why did EMV come about? American Express, Discover, JCB, Mastercard, UnionPay, and Visa all wanted to create a global standard for payment solutions.īecause the U.S. For instance, many new small businesses are choosing to stick with contactless payments, while older businesses have slowly begun to make the switch to EMV terminals and chip card readers. For the most part, they all work similarly, but it’s true - there is a multitude of payment options businesses can choose from.
You might feel like every time you walk into a store there is a different type of credit card terminal you’re swiping or dipping your card into. EMV Chip Technology: 6 Things You Didn’t Know