In recent years, a number of new credit card technologies have come to light in the U.S., and several were called the wave of the future. However, it seems that those containing built-in microchips — known as EMV cards — will be the first to catch on en masse with plastic issuers.
EMV cards are already used broadly in most of the world, accounting for some 45 percent of all cards now held worldwide, thanks in large part to years of distribution in Europe, Asia and even Canada, according to a report from the Merchant Warehouse. However, by October 2016, these cards are likely to be ubiquitous in the U.S. as well because Visa and MasterCard are giving businesses until that time to begin accepting payments made with these cards, mostly due to the fact that they are far more secure than traditional cards that store payment data on magnetic strips.
Those that do not become EMV-card capable will be liable for any fraud as a result of these purchases, which can total as much as $2.4 billion worth of bogus transactions annually, the report said. Already, the U.S. has been the No. 1 country for credit and debit card fraud in each of the last five years. However, 76 percent of all payment terminals worldwide are already equipped to accept this type of transaction, so all it might take is a relatively small rollout of these new card readers over the next few years to get the country up to speed with everyone else.
Further, EMV cards provide an additional layer of security even beyond the ways in which they protect data itself, the report said. In addition, they rely on neither PIN codes nor signatures, to verify a purchase; in general, these can potentially be somewhat easy for a criminal to duplicate (signatures potentially more so than a PIN code itself). These cards can also add safety measures when it comes to online purchases as well.
EMV cards may render skimming schemes, which rely on consumers swiping cards through a hacked reading devices, all but impossible to run. These have become a favorite of many fraudsters nationwide, as it may allow them to steal hundreds or more credit card numbers they can then use for all types of purchases in a relatively short period of time.