Since the Target breach last year, there has been a lot of talk about EMV or "Smart" cards. These are also called "Chip" cards. The biggest difference between these credit cards and magnetic stripe cards is that they have an embedded microprocessor in them. This allows the card to actually communicate with the payment terminal, instead of passively allowing its information to be read by a magnetic stripe reader.
The biggest advantage to these cards is that they can't be counterfeited, which reduces the incentive to steal credit card numbers in the first place.
Chip cards also contain information indicating the level of cardholder verification that is required for the card under different conditions. EMV payment terminals can then use this information to determine whether or not to authorize a transaction, even for transactions entered in offline mode.
EMV cards that require a pin number (Chip & Pin) are more secure than Chip & Signature cards, but both are a big improvement over traditional magnetic stripe cards. This technology is already in use in over 80 countries and many have seen a dramatic reduction in credit card fraud, as a result.
The current deadline for retailers to be able to accept smart cards is October of 2015. That is when credit card issuers plan to shift the liability for credit card fraud to merchants who don't use this technology. However, most smart cards will also have magnetic stripes, in case they need to be used in non-EMV payment terminals. That will probably be true for at least a few years because the deadline for gas stations to switch over is October of 2017.
--Lynda
The biggest advantage to these cards is that they can't be counterfeited, which reduces the incentive to steal credit card numbers in the first place.
Chip cards also contain information indicating the level of cardholder verification that is required for the card under different conditions. EMV payment terminals can then use this information to determine whether or not to authorize a transaction, even for transactions entered in offline mode.
EMV cards that require a pin number (Chip & Pin) are more secure than Chip & Signature cards, but both are a big improvement over traditional magnetic stripe cards. This technology is already in use in over 80 countries and many have seen a dramatic reduction in credit card fraud, as a result.
The current deadline for retailers to be able to accept smart cards is October of 2015. That is when credit card issuers plan to shift the liability for credit card fraud to merchants who don't use this technology. However, most smart cards will also have magnetic stripes, in case they need to be used in non-EMV payment terminals. That will probably be true for at least a few years because the deadline for gas stations to switch over is October of 2017.
--Lynda