EMV is the payment technology used by all credit cards and debit cards that have an embedded chip, which lets the cardholder “dip” the card into a reader to securely make the transaction. The letters “EMV” stand for “Europay, Mastercard and Visa,” the companies that developed EMV payment technology in 1994. Now, EMV technology is managed by EMVCo, an organization whose members include Mastercard, Visa, American Express, Discover, JCB and UnionPay. This makes EMV technology standard for all of the world’s biggest card networks.
Key Things to Know About EMV
- Security benefits: EMV cards are more secure than cards that only have a magnetic stripe, which is one of several reasons why the U.S. – and much of the world – has made the switch.
- Late adoption: The U.S. didn’t start adopting EMV until recent years, with the biggest shift triggered by a 2015 adjustment to fraud liability standards for payments.
- Merchant liability: Merchants that don’t have EMV-compatible card readers can be held liable for fraudulent transactions made with EMV-enabled cards.
- 2021 status: The U.S. has transitioned nearly all of its payment cards to EMV technology, and most merchants have EMV-enabled readers.
EMV relies on payment cards (credit and debit) that have a built-in computer chip, as well as special card readers made to scan those chips. The computer chip enables a greater deal of encryption and security than a card that only has a magnetic stripe that you swipe. That’s because the chip generates a unique code for every transaction, and it’s also nearly impossible to clone and create a counterfeit EMV credit card.
There are two types of EMV credit cards: chip-and-PIN and chip-and-signature. As the names suggest, a chip-and-PIN card uses a PIN you create to authenticate your transaction, while a chip-and-signature card requires you to sign your name. Chip-and-PIN cards are the more secure type, as it’s easier to fake a signature than it is to guess a PIN.
However, it’s important to note that not every merchant has a credit card reader that can read chips, which is why all EMV cards in the U.S. also have the traditional magnetic stripe. You lose out on the extra security offered by EMV technology when you swipe, though.
While the technology involved in EMV credit cards is pretty complicated, using an EMV card is actually quite simple.
How to use an EMV card:
- Have the merchant ring up your purchase.
- Dip your card in the reader, inserting the end with the chip face up.
- Enter your PIN or provide your signature, depending on the card.
- Confirm the transaction.
- Remove your card when prompted.
EMV cards can also be enabled to work with contactless payment readers. Instead of dipping or swiping the card, you tap it against a scanner that is equipped with NFC (near field communication) technology.
- Security: EMV chips are better encrypted than magnetic stripes and create unique transaction codes that can’t be used again.
- Universality: Credit cards that have an EMV chip can still be used at merchants that don’t have EMV terminals. You can just swipe the magnetic stripe on the card instead.
- Foreign use: Foreign EMV credit cards are usually chip-and-pin, but you can still use a chip-and-signature card at most foreign merchants without issue, unlike a card with only a magnetic stripe. The only places you might have trouble are at automatic kiosks or gas pumps, where you could need a chip-and-pin card or cash.
- Contactless: EMV cards can support contactless payments, though the share of EMV cards that have this feature is still relatively small. It’s up to the card issuer to include contactless capability or not.
- Offline: EMV supports offline transaction verification for some chip-and-pin cards, meaning purchases can be processed without internet connectivity. This is not possible with older card readers or cards with only a magnetic stripe.
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The U.S. was slower to adopt EMV technology than a lot of countries, but we’ve just about completed the transition in the past few years when it comes to payment cards. Merchants have lagged behind card issuers in adopting the technology, despite the fact that not upgrading puts the liability for fraud on the merchant.
EMV Credit & Debit Cards
Almost all credit and debit cards in the U.S. are now EMV cards. That’s around 1 billion cards total. Roughly 99% of overall U.S. payment volume is now on EMV cards, too. That’s a staggering increase from the 1.6% recorded in 2015, and shows how rapidly the U.S. has made the shift.
EMV in the U.S. still is a bit different than in the rest of the world, though. Currently, debit cards in the U.S. tend to be chip-and-PIN, while credit cards are usually chip-and-signature. Outside of the U.S., it’s more common for credit cards to be chip-and-PIN.
In addition, around 175 million EMV cards in the U.S. have contactless payments enabled as of 2021, according to Visa. That’s still a small amount compared to the 1 billion EMV cards in circulation in the U.S., but the technology will likely become more widespread in the future. Some issuers that have started offering contactless cards include Chase, American Express, Capital One, Citi, Discover and U.S. Bank.
EMV for Merchants
Around 75% of stores in the U.S. – over 3.5 million merchants total – have EMV terminals, according to Visa. While that’s a big jump from the fewer than 400,000 merchants that had EMV-compatible readers in 2015, it’s still low when you consider the fact that almost all cards use EMV technology.
When merchants don’t upgrade to EMV readers, they risk losing money if they’re held accountable for fraudulent purchases. EMV terminals can be expensive, often costing a few hundred dollars each, but making the upgrade is worth it in the long run. Plus, small businesses can also consider alternatives, such as using inexpensive EMV readers from companies like Square to process transactions (though there are transaction fees to watch out for).
EMV technology used to be rare in the U.S., but now it’s almost everywhere. It’s likely that every debit card and credit card in your wallet has an EMV chip built in on the right side. With EMV technology, you can rest assured that your transactions are as safe as possible, and card networks will continue to improve the technology in the future.