What are EMV Cards?

At a glance, credit cards and debit cards look similar. But their function is quite different. Debit cards pull cash directly from your bank account. Credit cards run a ‘tab’ up to a given limit, and you repay your tab at the end of your credit cycle.

Debit cards are usually inserted into an ATM and leaving it there until the transaction is complete. This could take as much as several minutes, because customers may, for instance, want to check their balance, withdraw, then check their balance again.

Addition of the chip

In the past, data was stored on a magnetic strip, the stripe that runs across the upper back of your card. These days, most cards still have the magnetic strip, but they have an added component too. On the front of the card, there’s a small, metallic chip. That chip is what marks your card as an EMV (Europay, MasterCard, Visa) card. EMV cards get their name from the first three card networks to adapt the chip, though the technology will eventually spread to their cards.

The chip offers an added layer of security. When you insert your regular card into an ATM, it asks you for your PIN. And if anyone can see or skim that PIN, they can steal your card data–and your money. EMV is more effective than regular PIN because EMV cards come with one-time encryption codes. Every time you use the card, it generates a new code.

Extra security

This matters because even if someone clones or steals the card, the data they stole will be invalid. They may have stolen the previous one-time code, but the next time the card is used, the card will generates a different one.

When using an EMV card, instead of swiping right through, users have to pause a few beats, giving the EMV chip time to generate and validate the one time code. It’s a few seconds longer than you might be used to, but it’s still pretty fast. Most card networks are switching over to EMV, so if you accept credit cards, then have a chat with your payment processor. Find out whether their current POS (point of sale) equipment is EMV-compliant.

For more information on EMV cards, or to sign up for a merchant account, please call (888) 924-2743 or go to Charge.com.