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The Evolution of Your Credit Card

If you’ve recently received a new credit card in the mail, you probably noticed something was different about the new card. The difference is a small, metallic chip on the front. That little chip means heightened security, which is great news for the 25 million people affected by credit card fraud each year.

Why should you be excited? Because that little chip, called EMV, is part of a new generation of smarter credit cards. EMV stands for Europay, Mastercard and Visa. The magnetic strip that has been ubiquitous with credit cards up to this point may soon be a thing of the past. Why? The magnetic stripe contains information that doesn’t ever change. That makes traditional cards prime targets for theft because hackers can copy the information on a magnetic stripe and reproduce that card.

In contrast, the information on chip cards is so transaction specific it’s pointless to try to steal it. Each time an EMV card is used for payment, the card chip communicates with the cardholder’s financial institution and creates a unique, one-time-use transaction code. If a hacker tried to duplicate a card using stolen chip information from that specific purchase, the fraudulent card would get denied because the stolen transaction number created would be linked to another purchase.

With holiday shopping season around the corner, that’s great news!

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