EMV Credit Card Chips Don’t Stop Fraud

New chip-enabled credit cards, known as EMV cards, which started rolling out to U.S. consumers starting in 2015 were intended to stop credit card fraud. Credit card companies like Europay, Mastercard, and Visa promoted EMV (which are the initials of the companies promoting the standard) as a merchant-funded way to force transactions over to a process known as “chip-and-PIN” where the computer…

The latest security measure pertaining to a credit card – the EMV chip is resulting in problems for small retailers. EMV is a technical term for smart payment cards and for payment terminals & automated teller machines that can receive them.

EMV (Europay, MasterCard and Visa) cards are also called as smart cards, chip cards, IC cards, which manage the data on combined circuits instead of magnetic stripes, even though several EMV cards consist of stripes for backward compatibility. They are actually contact cards that should be dipped into a reader, though they can also be contactless cards that can be read within a short distance utilizing radio-frequency identification (RFID) technology.

Currently, retailers are switching over to the new technology. They are asking the consumers to dip them into the card reader, which is more secure, instead of swiping credit/debit cards. It is supposed to have drastically reduced the incidents of theft related to card information.

Businesses have also started introducing the new readers. The transition may be simple as far as consumers are concerned, though it may take them some time to get used to it.

According to Stephanie Ericksen, Vice President of risk products at Visa, “The idea is that any thief who is able to intercept the code won’t be able to use it again to make a fraudulent purchase with a fake version of the card later on. (Essentially making it more difficult for someone to go on a shopping spree at a mall in Texas while you are physically in New York). Anyone, who would try to use a fake magnetic stripe version of the card at a chip terminal would be prompted to insert the card into the chip slot. The transaction would then fail”.

According to experts, as more and more retailers install the chip technology, it would be difficult to make fraudulent purchases. However, experts believe, the fraudsters would move online, using the card number and expiration date to make fraudulent purchases.

As per Rurik Bradbury, Chief Marketing Officer for Trustev (an organization that assists retailers identify online fraud), “Retailers are moving to catch fraud online by scanning for details, such as a person’s IP address, e-mail address and other data points, but their information is often limited. Some businesses may rely more on apps or programs such as Apple Pay, which work similarly to chip cards by also creating a unique code for each purchase”.

Make the Switch to New Payments Technology

Originally published on SBA.gov on Sept 17, 2015 and updated on September 28, 2015 By Maria Contreras-Sweet SBA Administer and Square CEO Jack Dorsey

This October, America will take a major step to mitigate fraud and improve our financial security by migrating away from outdated credit and debit cards that transmit sensitive customer data using magnetic stripes. In 2015, it should not surprise…

Infographic: Smartcards Rolling Out Over the Next Few Years

Wow… when you think about all the dedicated and dependent hardware for traditional magnetic striped credit cards, that’s a ton of equipment and expense out there to replace. Over the next few years, though, that’s exactly what’s going to happen! Traditional credit cards are on their way out.

It took the hacking of 70 million Target credit cards during the 2013 holiday season to spur Congress into…