Don’t close this window just yet because you don’t know what EMV is. If you think EMV does not apply to you, think again! Credit and debit card issuers are using EMV technology to change the way you pay with your card. So, even if you never heard of EMV, you will be affected by it.

Card issuers are pushing for each credit or debit card in the U.S. to be equipped with EMV-chip technology and for merchants to have EMV card readers by October 1, 2015. Why should you care?

EMV technology (EMV stands for Europay, Mastercard and Visa) works through a chip on your card that transmits a one-use code to the card issuer for payment authorization. This technology already exists with garage door openers. Each time the remote button is pressed, a unique code is transmitted to the opener.

This technology is designed to be more secure because it prevents copying. For example, a data thief can copy card information when the merchant suffers a data breach and then use that information to create a fake card for making fraudulent purchases. With EMV technology, the data thief must have your physical card to make transactions. Without the physical card, the data thief does not have the one-use code and is unable to gain access to bank funds or your credit limit.

In addition to this change, EMV card terminals require different interaction than the traditional swipe and sign/PIN pad terminal. EMV terminals read the chip, not the magnetic strip. As a result, the card is inserted into the terminal where it remains until the transaction is completed.

Although you might still be able to use your PIN, don’t be surprised if fewer merchants have PIN-enabled terminals as EMV technology is embraced.

Besides these adjustments in the way you use your credit or debit card, there are other reasons you should know what is in your wallet. EMV technology allows card issuers to shift liability for fraudulent transactions. Currently, the card issuer is responsible for covering fraudulent transactions. The recent Target data breach is testing that rule, however, because card issuers are claiming the merchant should bear financial responsibility for inadequate security of the data.

With EMV technology, liability for fraudulent transactions is shifting. Instead of the card issuer, the merchant will be liable in some cases, particularly if their card terminals are not equipped with EMV technology. Merchants do have to cover the cost of installing new EMV card terminals at cash registers, however, if merchants needed any incentive to comply with EMV technology, the shift of liability should be enough.

EMV technology does have its limitations, however. EMV technology only protects your account from in-store fraud. If a data thief steals card information from the merchant, the thief cannot use the information in a store. Without the chip on your card, stolen information is useless at a store terminal. However, the thief can still use stolen information to make transactions online or in transactions that do not require the card to be present.

For that reason, in-store fraud may decrease, but online fraud is likely to increase dramatically. That means there is likely to be an increased level of internet hacking and attempts to steal your data online.

Bottom line: EMV technology is going to change how you use your card, but it is not going to stop fraud. You should still take all available precautions to protect yourself. If you are a merchant accepting credit cards, take some time to consider whether you are prepared for EMV and how you can ensure your customer data is secure.

If you would like to receive more information on cyber security and our identity theft seminar, feel free to contact us to schedule a seminar.


Elaine Ritter
08/18/2015 7:10pm

Interesting. I had not heard about this. Thanks for educating us.


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    Climbing the Money Tree


    R. Joseph Ritter, Jr. CFP® is a CERTIFIED FINANCIAL PLANNER(TM) and founder of Zacchaeus Financial Counseling, Inc., a non-profit organization providing financial planning services to low-income households and households experiencing financial strain.

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