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Worldwide, credit card fraud is a huge problem, particularly in the U.S. In fact, it is believed that almost half of the world’s credit card fraud occurs in the U.S. To combat these crimes, credit card issuers will switch to EuroPay, MasterCard, and Visa (EMV). EMV is a new standard for authenticating cards. New cards feature a microchip, which protects against credit card fraud.
Traditional credit cards have a magnetic strip on the back, and consumers slide it through a reader at the register. The reader scans the card for pertinent information; however, it is not encrypted and does not change. If someone gains access to it once, they can steal card info and replicate the data easily. With EMV cards, the smart chip creates a transaction code each time it is used. The transaction code is unique to that scan, so it cannot be stolen and replicated. Though the data security threats persist, EMV significantly helps cut instances of credit card fraud.
The first few batches of EMV cards will have traditional magnetic strips, but that is only so businesses can accept them until they transition completely to the new system. EMV cards are “dipped” at new readers, not swiped. Cards are inserted into readers and held there for the length of the transaction. It will take slightly longer than regular magnetic strip cards, but the EMV card creates and communicates a unique code for the transaction.
This isn’t a completely new technology. For several years, many nations began to establish this technology. The U.S. is the last to catch on. Currently in the U.S., there are approximately 78,000 merchants implementing EMV-accepting POS terminals. Experts project an increase to 570 million EMV cards issued by the “Liability Switch” date of October 1st of this year.
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