It’s that small, metallic square you’ll see on new cards. That’s a computer chip, and it’s what sets it apart the new generation of cards.
The magnetic stripes on traditional credit and debit cards store contain unchanging data. Whoever accesses that data gains the sensitive card and cardholder information necessary to make purchases. That makes traditional cards prime targets for counterfeiters, who convert stolen card data to cash.
Unlike magnetic-stripe cards, every time an EMV card is used for payment, the card chip creates a unique transaction code that cannot be used again.
EMV technology will not prevent data breaches from occurring, but it will make it much harder for criminals to successfully profit from what they steal.
Experts hope it will help significantly reduce fraud in the U.S., which has doubled in the past seven years as criminals have shied away from countries that already have transitioned to EMV cards.
Counterfeit fraud rates have already decreased in the U.S. as a result of EMV adoption, according to MasterCard and Visa. In March 2017, chip-enabled merchants saw a 58 percent drop in counterfeit fraud compared to a year earlier, according to Visa. MasterCard noticed a difference even earlier: It recorded a 54 percent decrease in counterfeit fraud costs among its EMV-ready merchants from April 2015 to April 2016.

Just like magnetic-stripe cards, EMV cards are processed for payment in two steps: card reading and transaction verification.
However, with EMV cards you no longer have to master a quick, fluid card swipe in the right direction. Chip cards are read in a different way. Instead of going to a register and swiping your card, the card holder is going to do what is called ‘card dipping’ instead, which means inserting your card into a terminal slot and waiting for it to process.
When an EMV card is dipped, data flows between the card chip and the issuing financial institution to verify the card’s legitimacy and create the unique transaction data. This process isn’t as quick as a magnetic-stripe swipe.
While chip card transactions may take a bit longer than mag stripe transactions, total card processing time will vary between merchants and eventually speed up as the new payment environment is improved. It will vary depending on the merchant, the equipment and the point-of-sale system.

Not necessarily. EMV cards can also support contactless card reading, also known as near field communication.
Instead of dipping or swiping, NFC-equipped cards are tapped against a terminal scanner that can pick up the card data from the embedded computer chip.

Yes and no. You will have to do one of those verification methods, but it depends on the verification method tied to your EMV card, not if your card is debit or credit.
Chip-and-PIN cards operate just like the checking-account debit card you have been using for years.
Entering a PIN connects the payment terminal to the payment processor for real-time transaction verification and approval. However, many payment processors are not equipped with the technology needed to handle EMV chip-and-PIN credit transactions.
There aren’t going to be many issuers requiring a PIN, a vast majority will be issuing chip-and-signature cards, which aren’t all that different from how credit cards work now.
As with a magnetic-stripe credit card, you sign on the point-of-sale terminal to take responsibility for the payment when making a chip-and-signature card transaction.
U.S. chip-and-PIN cards will be transitioned in slowly. The card production demand today is really based on chip-and-signature cards. It will probably take two to three years to fully convert to chip-and-PIN.
Despite a slow transition overall, those who get chip-and-PIN cards will be able to use them right away.

If an in-store transaction is conducted using a counterfeit, stolen or otherwise compromised card, consumer losses from that transaction fall back on the payment processor or issuing bank, depending on the card’s terms and conditions.
Since the Oct. 1, 2015 deadline created by major U.S. credit card issuers MasterCard, Visa, Discover and American Express, the liability for card-present fraud has shifted to whichever party is the least EMV-compliant in a fraudulent transaction.
Consider the example of a financial institution that issues a chip card used at a merchant that has not changed its system to accept chip technology. This allows a counterfeit card to be successfully used. The cost of the fraud will fall back on the merchant.
The change is intended to help bring the entire payment industry on board with EMV by encouraging compliance to avoid liability costs.
Today, any parties not EMV-ready could face much higher costs in the event of a large data breach.

(FOR PETROLIUM INDUSTRY SUBSECTION Only)
Until recently, automated fuel dispensers had until 2017 to make the shift to EMV. However, a December 2016 Visa and MasterCard agreement now gives pay-at-the-pump gas terminals until October 2020 to become EMV-compliant.
So for now, gas stations do not fall under the existing EMV fraud liability shift rules. ATMs still have two fraud liability shift dates: MasterCard’s that passed in October 2016 and Visa’s in October 2017. Until both dates pass, ATMs will follow existing fraud liability rulings.

Not yet.
Although the deadline was strong encouragement for all payment processing parties to become EMV-compliant as soon as possible, not everyone has made the transition yet.
Most countries that migrated to EMV have four or five banks that issue cards and a couple of acquirers that provide a service to merchants. The United States has over 13,000 financial institutions that issue credit and debit cards, and we have 5 million merchant locations in the U.S. that accept debit and credit cards. So it is a massive undertaking.
EMV debit cards have rolled out at a slower pace. Approximately 25 percent of U.S. debit cards were issued as EMV chip cards by the end of 2015. That ratio rose to 33 percent by the end of June 2016, and today, approximately 60 percent of issuer’s debit cards are EMV chip-equipped, according to CPI Card Group estimates.
EMV debit cards are slowly being issued because banks have to prep their software to accept those new cards as well.
The EMV credit card rollout, however, is progressing steadily. More than 449 million Visa chip cards have been issued in the U.S. overall so far, as of June 2017. About 68 percent of MasterCard-branded credit and debit cards have been issued with chips so far, as of Oct. 1, 2016. For all U.S. credit cards, CPI Card Group estimates approximately 85 percent of cards now have chips on them. Overall, 70 percent of cards (debit and credit) have been converted to EMV, per CPI Card Group.

Yes. The first round of EMV cards — many of which are in consumers’ hands — will be equipped with both chip and magnetic-stripe functions so consumer spending is not disrupted and merchants can adjust.
If you find yourself at a point-of-sale terminal and are not sure whether to dip or swipe your card, have no fear. The terminal will walk you through the process. If you enter a card into the chip reader slot but the reader isn’t activated yet, it will come up with an error and you’ll be prompted to swipe the card in order to use it. And vice-versa. If a consumer tries to swipe a chip card instead of inserting it, an error will appear and they will be prompted to insert the card for chip processing instead.
If chip-card readers are not in place at a merchant at all, your EMV card can be read with a swipe, just like a traditional magnetic-stripe card.
While many large retailers, such as Walmart, Target and Costco, have upgraded their POS terminals and have activated them for chip card acceptance, many U.S. retail locations are still not EMV-ready.
In July 2017, U.S. Payments Forum estimated 45 to 50 percent of U.S. credit and debit card transactions were chip-on-chip.

Yes and no.
The U.S. is the last major market still using the magnetic-stripe card system. Many European countries moved to EMV technology years ago to combat high fraud rates. That shift has left many U.S. consumers who have magnetic-stripe cards looking for other forms of payment when they travel.
Since many foreign merchants are wary of magnetic-stripe cards, consumers who hold some type of chip card may run into fewer issues than those without one.
Just the existence of the chip will likely make European merchants more willing to accept transactions that they wouldn’t have likely accepted if a customer presented a mag-stripe card, which is good news for traveling U.S. cardholders.
However, chip-and-PIN cards are the norm in most other countries that support EMV technology. So consumers with chip-and-signature cards may find some merchants who are unwilling or unable to process their card, even though it does have an embedded chip.