This technology, also referred to as EMV, uses a microchip on your credit card to encrypt your financial information. It’s a more secure version of the magnetic strip that’s on the back of your credit card now. It’s verified at a point of sale terminal, just like a normal credit card. The more advanced technology makes it possible to have a stronger form of encryption, which makes your data more secure.
The cost of implementation has always held EMV technology back, because that cost was greater than the amount of fraud loss it would prevent. Now, with data theft affecting more and more retailers and consumers, the calculations are changing. In addition, regulatory changes have made retailers liable for more fraud damages, and that makes this technology more cost-effective. So what does this technological change mean for you? Let’s look at three differences you’ll see with your chip-enabled card:
- More security
The greatest benefit is the increased level of encryption to protect your data. The magnetic strip cards can be read and copied from a point of sale terminal. This vulnerability allows one of the most common forms of high-tech identity theft. EMV technology encrypts your data from the point of sale terminal to your financial institution.
- New ways to confirm your identity One of the features of EMV technology is the ability to store a unique personal identification number (PIN). You can use it in place of your signature to show that you’re the rightful owner of the card. This will make in-person shopping more convenient and more secure. Says one security expert; “It’s easier to forge a signature than steal a PIN.” Some retail workers don’t receive much training in verifying signatures, so a PIN provides a more secure way of completing transactions.
- Fewer hands on your card One of the benefits of having more data processing power in your wallet is that it’s easier to integrate it with other machines. EMVCo, the company behind the technology, is exploring mobile connection options for their cards. The big idea here is to make it possible to complete a transaction without ever having your card leave your pocket or purse. You can just enter your PIN and approve the charges at a point of sale terminal, and the computers will do the rest. The risks of fraud and theft decrease because fewer humans actually see the card.