Magnetic strip to computer chip – EMV credit cards

EMV Chip

A majority of cardholders in Europe and Asia have used “smart cards” with embedded EMV chips for over a decade.

“EMV” means Europay, Mastercard and VISA, the chip card producers and developers of global standards for the technology.

The head of Smart Card Alliance, Randy Vanderhoof says: “The chip is a microprocessor computer just like any intelligent device — like a phone or a tablet or a laptop.”

Rather than swiping credit cards, the Wall Street Journal advises:

“…you will insert your card into a slot, just like people do in much of the rest of the world, where the machine will read a microchip, not a magnetic stripe. You’ll still be signing for the time being, but the new system also enables the use of PIN numbers, if card issuers decide to add them to their cards.”

The U.S. issues about 25 percent of credit cards worldwide – projected to reach over 600 million by the end of 2015, but only last year began the migration to the more secure EMV chip. After EMV cards were introduced overseas the previously much higher levels of fraud declined, so fraudsters changed their targets to the U.S. market. Consequently, nearly 50 percent of all credit card fraud happens here.

Liability shifts for fraudulent card use

Merchants who accept credit card payments will have to upgrade their card reading equipment by October 1, 2015 or accept potential liability for fraudulent credit card transactions. This is a change from current practice holding banks that issue the credit cards liable. Determinations of liability will favor the party with the highest level security technology.

Depending on the cost to upgrade to EMV-chip readers, some businesses may decide not to. Instead, in cases where upgrades are unaffordable, some small business owners may decide to revert to cash-or-check only transactions. says gas stations will have until 2017 to upgrade to EMV cards “…because installing the new card readers with explosive gasoline around could be complicated.” The link leads to the site’s informational videos on this and related FAQs.

Two local banks explain EMV


  • Chip card technology creates a one-time transaction code per in-person purchase, which makes duplication and card copying very difficult.
  • Many merchants will update their Point-Of-Sale (POS) systems to accept both magnetic stripe and chip cards. Chip-enabled terminals will allow the chip cards to encrypt the data shared during each in-person transaction. This means hackers will be much less likely to access full payment data from payment terminals.


  • Convenient Traveling: Chip cards make traveling easier and more convenient with its wide acceptance. The traditional magnetic stripe on the back allows you to continue using it at stores without chip-enabled terminals.
  • Simple & Easy: Either insert your chip card into the store’s terminal or swipe the magnetic stripe as prompted by the merchant.
  • If prompted to insert your chip card, look for the slot on the bottom-front of the terminal and insert your card face up, chip first. Leave your card in the terminal until the transaction is complete. The terminal will prompt you to either enter a PIN or sign to validate your identity.
  • Don’t forget to take your card out when prompted.

Many credit card issuers have already begun issuing the new EMV cards; others will replace the magnetic strip cards when the cardholder’s current card expires. For more specific information, contact your card issuer.

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