EMV: The Future Of Card Security
Target, it seems, was just the tip of the iceberg. Security breaches at Home Depot and Staples stores have put many retailers on the defensive. They need to repair their image and restore consumer confidence. That's why the timing couldn't be better for advocates of a new generation of security technology who see the retailers' needs for image repair as a chance to speed deployment of EMV. EMV derives its name from the three major companies who are behind the protocol development: Europay, Mastercard, and Visa.
EMV technology uses a microchip on your credit card to encrypt your financial information. It's just a more secure version of the magnetic strip that's on the back of your credit card now. It's verified at a point of sale terminal, just like a normal credit card. The more advanced technology makes it possible to have a much stronger form of encryption, which makes your data more secure.
The cost of implementation has always held EMV technology back, because that cost was greater than the amount of fraud loss it would prevent. Now, with data theft affecting more and more retailers' profits, the calculations are changing. Regulatory changes in 2015 will make retailers liable for more fraud damages, and that makes EMV technology more cost-effective. Target has already committed to implementing EMV technology. Other retailers will not be far behind. Make no mistake- EMV is coming. In fact, your Northeast Credit Union (NECU) Visa debit and credit card now comes with chip technology built right in.
What does this technological change mean for you? Let's look at three differences you'll see, perhaps as soon as next year.
The greatest benefit is the increased level of encryption to protect your data. The current magnetic strip cards can be read and copied from a point of sale terminal. This vulnerability allows one of the most common forms of high-tech identity theft. EMV technology encrypts your data from the point of sale terminal to your financial institution. However, since the US is a late adopter of EMV technology, which is already in use throughout Europe, it is still relatively easy for hackers to exploit. Thieves steal magnetic strip data in the US and use them in Europe. Adopting the modern global standard of data security will help prevent this international crime.
New ways to confirm your identity
One of the features of EMV technology is the ability to store a unique personal identification number (PIN). You can use it in place of your signature to show that you're the rightful owner of the card. This will make in-person shopping more convenient and more secure. Says one security expert; "It's easier to forge a signature than steal a PIN." Minimum wage retail workers don't receive much training in verifying signatures. A PIN is far more likely to be a secure way of completing transactions.
EMV will also make it easier to shop online. Instead of a security number on the back of a credit card, you will use the same PIN that is used to verify your identity in stores. This change will make it faster and easier to use your credit card online.
Fewer hands on your card
One of the benefits of having more data processing power in your wallet is that it's easier to integrate it with other machines. EMVCo, the company behind the technology, is exploring mobile connection options for their cards. The big idea here is to make it possible to complete a transaction without ever having your card leave your pocket or purse. You can just enter your PIN and approve the charges at a point of sale terminal, and the computers will do the rest. The risks of fraud and theft decrease because fewer humans actually see the card.
It's also more hygienic. 7 percent of dollar bills harbor dangerous bacteria, and plastic could go the same way. The cashier who handles your card also handles the cards of everyone else who's in line, and has a chance to pass all those germs on to you. Removing the human touch removes a lot of risk of infectious disease. This technology can make us all healthier.
EMV technology is the future and it'll be here soon (when your current card expires, we'll send you one). Aside from getting a new card issued to you and maybe learning a new PIN, you don't have to do anything. Just sit back and enjoy the wonders of technology.