How To Use A Chip And Pin Or EMV Credit Card

July 23, 2014, Written By Natalie Rutledge
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EMV cards are named for the credit card companies that developed the security system—EuroPay, MasterCard, and Visa. EMV cards are sometimes referred to as chip and pin cards.

The great majority of credit cards issued in the United States operate on a magnetic strip. But the EMV cards have an embedded chip that carries a host of data and transmits it during transactions. Instead of being swiped at a point of sale terminal, EMV cards are inserted into a port during transactions, where the chip’s information is read and transmitted to the appropriate parties. The chip uses a different encryption for each transaction, which security experts and credit card companies say makes the entire process safer for all parties involved. Without the magnetic strip, it is harder for identity thieves to steal data by skimming. With separate sets of encryption for each transaction, it is harder to hack into a retailer’s data system and steal valuable data.

EMV cards are coming to the United States within the next few years, which makes it important for consumers to be familiar with them. EMV cards might seem like a mystery at first, but they aren’t much different than debit cards currently issued and used throughout America.

How EMV Cards Work For Customers

EMV cards work for consumers in much the same way as debit cards. The biggest difference between EMV cards and what consumers are currently using in the United States is the point of sale terminal. Currently, when making a transaction, consumers swipe their card (or have it swiped for them). When using a credit card, the transaction is usually complete at that point. With a debit card, a consumer might enter a PIN or complete their signature at the end of a purchase. However, EMV cards can’t be read by some current point of sale terminals in the United States because they do not carry a magnetic strip. Instead, EMV cards have a chip embedded that can only be read when inserted into a point of sale port. Customers would insert their EMV card into the port, and then enter their PIN or complete their signature to finalize the purchase. The learning curve isn’t steep for these cards, and American consumers will quickly find that they aren’t difficult to use. The security benefits definitely make them worthwhile. Over the next few years, consumers will be able to experiment with EMV cards and get to know the process as they are eased into the U.S. market.

How EMV Cards Affect Merchants

The good news is that EMV cards are instantly going to make in-person transactions with merchants significantly safer. Consumers using their cards at point of sale terminals will have much less to worry about when it comes to fraud and identity theft. However, security experts are already warning that fraudsters are going to move to the next available channel, and that looks to be online or card not present (CNP) sales. Merchants will likely have to invest more to protect the authenticity of CNP sales in the future.

Customers Can Feel Safer

One of the biggest benefits of EMV cards is their security features. While magnetic strip credit cards are much easier to skim and copy, the opposite is true for EMV cards. The embedded chip in EMV credit cards encrypts data in a different manner with each transaction. Magnetic strip credit cards do not, and their data is more vulnerable as a result. EMV credit cards are not only safer for consumers, but also for merchants and banks, which have to worry about fraudulent claims and charge back rates. Merchants and banks are usually the big losers when it comes to credit card fraud, which means they will benefit from the switch to EMV credit cards.

In addition, when consumers feel safer and more protected, they may be more willing to spend. This may be an additional reason for the switch. Look for merchants and banks to heavily promote the safety features of the new EMV credit cards.

At the end of the day, EMV cards are easy to use, and they are safer than the current magnetic strip credit card system. The problem is not safety features; it is one of cost—for credit card companies, banks and retailers. Retailers will have to outfit their stores with new point of sale terminals, credit card companies will have to issue credit cards that are more expensive to manufacture, and banks will need new ATM machines that work with EMV cards.

The startup costs for EMV technology will be in the billions, and that’s why it has been slow to catch on in the United States. But once the startup cost hurdles are cleared, EMV cards will likely become the industry standard. The cards already hold that position in Europe, and despite their reputation in the U.S., they are quite easy to use.

Just like with a debit card purchase, you’ll either enter your PIN or a give your signature when you make an EMV transaction. The process is simple, and American consumers will find that the transaction will be a much smoother one than anticipated. You can expect the move to EMV cards to take place over the next few years, as consumers, retailers and banks in the United States become more comfortable with the technology.

Don’t expect the buzz about EMV cards to grow quiet anytime soon, since their simplicity of use and security features are big hits in Europe and will be attractive in the United States as well.



The information contained within this article was accurate as of July 23, 2014. For up-to-date
information on any of the terms, cards or offers mentioned above, visit the issuer's website.


About Natalie Rutledge

Natalie Rutledge majored in Communications at Mississippi State University. She was in sales for a number of businesses and spent nine years working as a communications advisor to various entities. Natalie can be contacted directly at [email protected]
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