Chip_Cards_body.jpgBy Jennifer Shaheen.

EMV chip-enabled credit cards were introduced in October. These cards—named for Europay, MasterCard, and Visa, the companies that created the standard—feature an embedded computer chip which generates a single-use code for each transaction, making them more secure than the previous generation of swipe strip credit cards. EMV chips also support near-field communication, which is the technical name for what happens when customers pay using a digital wallet app on their smartphones, such as Apple Pay.

There was widespread concern among retailers regarding the timing of the introduction of the new technology, as the roll out came at the beginning of the busy holiday shopping season. One of the biggest worries:  adoption hurdles could be costly. However, perhaps motivated by the knowledge that they’d be held financially liable in the event of a customer data breach, some of the nation’s largest retailers, including Wal-Mart, Target, and Home Depot moved forward and began accepting the EMV chip enabled cards.

Improving security

So how have the new EMV cards been received? Results have been mixed. A recent survey by the Mercator Advisory Group, a research firm that focuses on the payment industry, reveals that 34 percent of credit card users appreciate the increased security that comes with the new cards.


Harbortouch, another payment industry research firm, reports that one in five consumers consider transaction time to be their top concern. Retailers and customers alike are on the same learning curve when it comes to using the new card readers correctly, and this can slow the checkout process down. Assuming no human error, using a chip card takes seven to 10 seconds, compared with two to three seconds for swipe cards.

Understanding your liability

High-profile security breaches in recent years led directly to the adoption of the EMV chip card standard. There are industry critics who say that even this level of enhanced protection is not enough. Many are advocating for a chip + PIN standard, similar to what is already in place in Europe.

For the moment, however, the EMV chip card is considered the acceptable minimum standard for any retailer or financial institution that wants to minimize their liability in the event of a data breach. All retailers are expected to be EMV chip card compliant by 2017, at which point customers will be used to a slightly slower, but much safer, checkout process.

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