EMV Chip-Based Credit Cards Coming to the US
The credit card industry overseas uses EMV technology to reduce fraud, and the technology is slowly starting to make it’s way to the United States. EMV cards store credit card data on a computer chip rather than a magnetic stripe, making them more difficult to hack into than cards using the traditional magnetic stripe.
The executive director of the Smart Card Alliance, Randy Vanderhoof, indicates that there are 1.3 billion chip-based credit cards in circulation around the world, with a few thousand issued in the United States.
The technology has been slow to catch on in the United States because it requires merchants purchase new credit card processing equipment in order to read the chip-based cards. The cards themselves cost about $3 each to produce, compared to about 30 cents per traditional credit card with the magnetic stripes. The costs of upgrading the equipment has prevented many merchants from getting on board, but credit card processor Visa Inc announced a program in August of this year hoping to drive merchants to adopt the EMV technology. Their program would allow merchants to save money through avoiding certain annual security reviews once upgraded to the chip-based checkout systems. In 2015, Visa also intends to pass on more of the credit card fraud expenses to retailers’ banks rather than the merchants.
but J.P. Morgan Chase is now offering a Visa branded, chip-based, British Airways credit card. When US credit card users travel abroad, they are finding it increasingly difficult to use their magnetic stripe credit cards, as many merchants overseas no longer have credit card processing equipment for this type of card. If buying train tickets through machines, or using sales kiosks, you can’t swipe your card unless it has EMV technology.
The British Airways credit card offered by J.P. Morgan Chase is their third chip-based credit card, designed to help frequent travelers. All three chip-based cards also feature the traditional magnetic stripe so US customers can continue to use their card domestically, as well.
Similar announcements of upcoming United States chip-based credit cards have been heard from Wells Fargo, Bank of America and US Bancorp.