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What is EMV?
An EMV chip is a small microchip embedded in your credit card. Not all credit cards have EMV chips, but issuers will be strongly incentivized to issue cards with chips by October 2015, when a liability shift for fraudulent transactions will occur.
EMV chips have two major card verification methods (CVMs) — chip-and-signature and chip-and-PIN. Chip-and-signature cards, which are most popular in the U.S., use signatures to verify ownership for purchases. Chip-and-PIN cards are more popular in Europe, and use a four- to six-digit PIN for verification.
Chip-enabled cards are more secure than traditional magstripe cards. Instead of processing limited data that’s easy to duplicate, EMV chips transmit dozens of pieces of data between the card, the terminal and the acquiring bank’s host. In addition to the extra security, many overseas merchants won’t accept magstripe cards, so it’s a good idea to have a credit card with an EMV chip.
Using credit cards with EMV chips is a bit different, too. Instead of swiping, you’ll insert your card into the EMV terminal chip first and leave it in until your receipt starts printing. In the meantime, you’ll follow the prompts on the terminal screen, which will include instructions to sign, if necessary.