Now that October is underway, you might have noticed that the procedure at your favorite retailer has changed. If your credit card is equipped with EMV technology, you might be required to ?dip? your card, rather than swipe it.
In the wake of data breaches and concerns about privacy and credit card security, America is catching up to the rest of the world when it comes to ?smart card? technology. This is known as EMV technology, and it includes having a small computer chip on your credit card.
Using the new cards requires you to adjust some of your expectations when you use them at the store, and it?s also important to understand that EMV technology isn?t a cure-all for data breaches.
How Does EMV Technology Work?
With a traditional ?swipe? credit card, the information about your account is contained in the magnetic stripe on the back of the card. All of the information is the same each time you swipe the card.
The new chip cards contain small microchips that generate unique transaction data each time the card is swiped. This makes it harder for scammers to get the data they are looking for at the point of sale. Hackers can?t use the same information for later transactions.
On a practical note, using a card with EMV technology means that you have to actually insert the card into the terminal at the point of sale, rather than swipe it through a reader. You might need to leave the card in the terminal until the transaction is finished. This can slow you down a little bit, and it requires a little more attention as you move through the checkout line.
Check out Discover?s EMV Resource Center for helpful information about chip cards and the liability shift, as well as this brief training video which demonstrates a smooth checkout experience with chip-enabled cards.
Not all retailers have adopted EMV technology for their terminals, so you might still be able to swipe your card in some places. However, most retailers are likely to catch up soon because some of the payment processors are placing more of the liability burden for fraud on merchants who don?t comply with the new standards.
One of the nice things about this move is that European countries have been using chip technology for years. As a result, travelers are likely to find that they no longer have to request special cards before they head overseas.
Will EMV Technology Prevent Fraud?
These new credit cards can protect against fraud that happens at the point of sale, when hackers steal transaction data. However, these chip cards won?t prevent the sort of fraud that comes when someone steals your credit card number and other information. Saved card numbers and other data that is obtained through large data breaches not related to specific transactions made at a point of sale are still a major concern.
While the new technology will prevent some types of fraud, it isn?t a failsafe for all types of fraud. You still need to be vigilant about your accounts and your credit, and pay attention to the possibility of fraud. Also, keep in mind that if you are a Discover cardmember you are always covered by their $0 Fraud Liability Guarantee, and many other cards offer the same protection.
Disclosure: This blog post was written as part of a sponsored program for Discover Financial Services. All views expressed are entirely my own, and were not influenced or directed by Discover Financial Services.