A Guide to EMV (Chip Cards)

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What you need to know about EMV (Chip Cards)

EMV or chip cards contain a computer chip that will make duplicating cards increasingly difficult. The chip actually sends a unique code for each transaction where the card is present for the transaction. This technology has been available for many years in Europe and the rest of the world. The technology has been slow to come to the US because we are the largest and most complex payment market in the world.

What is the October 1 deadline?

The October 1, 2015 deadline that is being discussed in the media was set by Visa and MasterCard for the date where credit card issuers and merchants should have EMV capable cards and merchant terminals. This deadline represents a shift in liability for fraudulent transactions to the party who does not have a EMV capability in instances where the card is present for a transaction. So for example, if a card has the chip and the merchant does not and the card is used fraudulently, then the merchant become liable for the transaction. In the past, the liability was always passed on to the card issuer. The card holder still has no liability for fraudulent transactions same as before the deadline.

How does paying with an EMV card work?

If you have an EMV card and you are paying at an EMV capable terminal, a big change will be that you leave your card in the terminal for the entire transaction. Once the transaction is complete, you will have to remember to remove your card.

What is your credit union’s plan?

We have two separate EMV projects going on. The first is for our new credit cards which we hope to make available to members before the end of the year. To learn more about our new credit cards, click here. The second project is for our debit cards. We are working with our processor on adding the EMV capability to our debit cards. For both card types, we will continue to print them in our offices. Once our debit card project is complete, all newly issued debit cards will have the EMV chip. Members will begin to receive EMV debit cards at renewal of their current debit cards.

EMV Highlights

  • All cards issued with EMV will also have the magnetic strip on the back of the card for the foreseeable future.
  • EMV only applies to transactions where the card is present so online transactions will not use the EMV technology.
  • Card holders continue to have no liability in the event of fraud with the only liability shift taking place between card issuers and merchants.
  • Only the largest retail merchants such as Target and Walmart have EMV enabled payment terminals. Most smaller merchants do not have the EMV terminals yet.
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