Do All Credit Cards Have Chips?
In October 2015, Americans were introduced to EMV payment technology. Instead of using the magnetic stripe on the back of a credit or debit card, point-of-sale systems started processing payments using a smart chip embedded in the card.
Why the change?
The credit card industry switched to EMV technology to make transactions more secure. When you swipe your credit card using the magnetic stripe, all of your payment card details are transferred digitally from the store to the bank and then back to the store. If someone is able to hack the point-of-sale system, they can easily steal all of your credit card information and use it to purchase goods fraudulently. Hackers will also package and sell stolen credit card data on the dark web.
EMV cards work differently. The EMV chip creates a unique token for each transaction. Thus, if someone hacks the point-of-sale system, they will not have your full credit card information. Instead, they will have a token that is useless for future transactions.
Do all credit cards have chips?
The majority of credit and debit cards do have EMV chips. However, even though it has been three years since EMV technology entered the United States, not all cards carry this technology. If they are so much safer, what’s the delay?
The main reason for the slow adoption is that this has been a pricey change for retailers and credit card companies. Retailers have had to upgrade their payment card systems, and it is a costly endeavor for credit card issuers to both upgrade the cards and issue new cards to account holders. Because of the expense, credit card companies focused on reissuing their most popular cards first and have been slower to upgrade their less popular products.
However, cards without the chip are definitely in the minority, and since early studies indicate these cards have decreased fraud, it is likely credit card companies will soon have all cards updated. Once all cards have an EMV chip, retailers will step up their efforts to upgrade their point-of-sale systems. At that point, retailers will not have much of a choice—if the credit card has an EMV chip, but the point-of-sale system is not EMV-compliant, fraud liability shifts to the retailer. In other words, if the retailer does not have the proper equipment to process an EMV card, they will have to pay the price if someone steals your credit card details.