What You Need To Know About EMVs

Are you a swiper or a dipper? Chances are, you have at least one EMV chip-enabled card in your wallet. EMV, which stands for Europay, Mastercard and Visa, was introduced in the U.S. about 18 months ago. The cards are also called smart cards, chip cards and smart-chip cards.

Here’s what you need to know about the new generation of cards as well as some valuable information from Upper Cumberland FCU’s very own Card Specialist Rachel Dalton.

1.) Increased protection against fraud The main reason behind the switch is to curb rampant credit card fraud in the U.S. Experts pin the high rate of fraud on the outdated magnetic-strip system the country had been using. “UCFCU experienced over 30K in debit card fraud in 2016 alone.” Rachel D. –UCFCU Card Specialist.

Magnetic strips store static, unchanging data. Whoever gets their hands on that data can then do anything with it. In contrast, EMV cards create a unique transaction code for each purchase you make. That code cannot be reused, so even if a fraudster steals the chip information from a transaction, they won’t be able to use it for another purchase.

Rachel D. UCFCU Card Specialist says “Not only have we have started issuing the new EMV(chip) cards but we are watching all the fraud trends and try to limit certain merchant categories from processing any transactions in an attempt to lower the loss for the credit union and our members.”

2.) How it works Like their counterparts, chip cards are processed through card-reading and verification. However, instead of a quick swipe, you’ll be asked to insert, or dip, your card into a terminal slot and leave it there as the transaction is processed.

When your card is dipped, data is transmitted from the card chip and the issuing financial institution to verify the card’s legitimacy and create the unique transaction code. This process takes longer than a swipe.

After you’ve inserted your card, you may be asked for a PIN or a signature which will be transmitted to the payment terminal for verification. If your merchant doesn’t have a chip-card reader, your EMV card can be read with a swipe. Also, if you’re unsure of whether to dip or swipe, the terminal will guide you.

3.) Fraud liability changes The shift to EMVs presents several changes for merchants and financial institutions. Issuing new cards and purchasing new processing technology is an expensive undertaking. But there’s more than just cost involved – the switch brings new liability rules.

Also, chip-card fraud is difficult, but still possible. In the event that an EMV card is frauded, who is held responsible? Since Oct. 1, 2015, the liability for card fraud has shifted to whichever party is the least EMV-compliant in the transaction. If the merchant isn’t equipped with chip- card reading equipment, they will be held responsible; if the consumer’s financial institution has not provided them with an EMV card, they foot the bill. “Not only do we have the EMV (chip) Debit Cards, UCFCU also offers an EMV Credit Card program so that if your debit card is offline for any reason, the credit card is a perfect back up plan.” ~Rachel D. UCFCU Card Specialist.

4.) Increase in online fraud The EMV transition has spiked online fraud. Chip cards or magnetic stripe, for online purchases, has no difference. When buying something online, it’s your responsibility to take security measures.

Never give personal information by email or authorize a wireless money transfer for a merchant if you are not familiar with them. Also, if possible, choose tokenized systems like Apple Pay.

“The main type of fraud that UCFCU is seeing here is in the CARD NOT PRESENT (online or phone) transactions and that is why we have set the limits low for those types of transactions. We have also seen a huge rise in the scam where you get a free trial for $4.95 and give these companies your card information and which in the contract they add that you will be automatically enrolled for a subscription of more products to be delivered, then they set up an automatic withdrawal, so please be cautious in giving out your card number to anyone.” ~ Rachel D. UCFCU Card Specialist.