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What Will EMV Chip Cards Mean for Americans?
Not long ago, as I prepared for my first trip to NXP headquarters, in Eindhoven, I got some unexpected advice: “Take cash.”
Like most people these days, I don’t use a lot of cash, since debit and credit cards are accepted just about everywhere. But U.S. cards, which use a magnetic stripe and not an EMV chip for the security credentials, don’t always work with Europe’s EMV-based card readers and that can spell trouble for Americans abroad.
So I exchanged dollars for euros and carried cash. It wasn’t ideal. I fumbled with the unfamiliar bills and coins, and worried about having money on my person and in my luggage. A card would have been easier, faster and less stressful.
The shift is on
But times change, and I won’t have to deal with so much cash next time. Thanks to what’s called the “EMV liability shift,” America is transitioning to EMV chip-card technology, and I just received my final replacement EMV-equipped card.
The EMV liability shift is an incentive for American retailers and banks to start supporting the EMV format. As of October 2015, U.S. merchants who haven’t adopted the EMV technology will be liable for any counterfeit fraud losses when chip cards are used. Over a two-year period, the shift will cover merchants, ATM operators and fuel resellers. By October 2017, EMV chip cards should be the norm.
Higher security = less fraud
The transition to EMV cards is, for many Americans, long overdue. The total cost of fraud in the U.S., according to EMVCo, is estimated at $8.6 billion a year, and mag-stripe cards are part of the problem. Relying on only the cardholder’s signature and a visual check of the card, mag-stripe cards offer minimal security.
EMV cards are a better option, since they use a secure microprocessor to protect data and maintain privacy. The data stored on an EMV chip is encrypted, so the card is harder to clone and the chip performs cryptographic processing, during a payment, to protect privacy.
What about you?
Have you had problems with a mag-stripe card? Do you think EMV cards are more secure? Will you be impacted by the upcoming shift? Let us know.
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