EMV Chip Cards
Introducing Chip Cards
First National Bank will soon be offering debit cards with chip technology - and enhanced security.
When used at chip-enabled terminals and ATMs, chip cards add a new layer of security, providing greater protection against counterfeiting and other fraud that targets consumer accounts and costs merchants and financial institutions billions of dollars a year.
The switch from magnetic stripe cards to chip cards will bring some changes to the point-of-sale payment process for cardholders and merchants.
When Will I Receive My Chip Card?
Chip Cards will be re-issued according to the Month (not year) that your card expires. For example, if your card expires in 09/18, your new chip card will be issued in September 2016 and will have a new expiration year. When you receive your new card please activate it as soon as possible. The old card will be de-activated once the month ends. Your new chip card will have the same card number.
What is a Chip Card?
- A chip card - also called an EMV card or smart card - is a debit or credit card that contains an embedded microprocessor that enhances the security of cards during card-present transactions.
- These cards use a security standard originally developed by Europay, MasterCard and Visa (EMV) as a way to fight the growing problem of card fraud resulting from counterfeiting and lost or stolen cards.
- The goal is to have chip cards and other forms of secure payment replace cards with only magnetic stripes.
- Chip cards are designed to work with chip-enabled terminals using EMV technology. Transactions become more secure because the data exchanged is unique to each purchase.
- Cryptographic authentication technology is used to protect the security of data during card authentication, cardholder verification, and transaction authorization.
- Already in wide use in countries around the world, financial institutions in the U.S. have started reissuing chip cards to consumers. Because this is a global payment standard, chip cards can be used around the world.
What Makes Chip Cards Different?
- Traditional credit and debit cards in the U.S. have used a magnetic stripe on the back of the card. The stripe contains cardholder data that doesn’t change. In the wrong hands, this data can be skimmed or copied and used to make counterfeit cards, which can then be used to commit fraud.
- Chip cards contain a computer chip that creates a unique transaction code for each purchase, and the card is customized for each cardholder. This technology protects against card-present fraud.
- Chip cards will still have a magnetic stripe on the back because not all businesses are expected to convert their card-reading payment terminals to chip-enabled terminals right away.
Swipe or Insert?
- If a consumer has a chip card and the business has not yet converted, the magnetic stripe will be swiped as it is today so a payment can be made.
- But if the card and payment terminal are EMV compliant, a consumer will insert the card into the terminal, leave it in and follow the instructions on the screen until the transaction is complete. Then they will remove the card.
What Do Chip Cards Look Like?
- Basically, chip cards look like any other credit or debit card.
- They will continue to have branding, account numbers, an expiration date and the cardholder’s name.
- The chip placement will be visible on the front of the cards, on the left-hand side.
- The chip area is square to rectangular and looks metallic.
- There will still be a magnetic stripe on the back of chip cards.
Are Chip Cards Safer Than Magnetic Stripe Cards?
- Yes. When both the card and the card reader are EMV-compliant, chip cards are more secure than magnetic stripe cards.
- Chip cards use cryptography to ensure that each transaction is unique.
- If data were somehow stolen from a chip card transaction, it could not be used to make another card or purchase because each transaction is unique.
- Magnetic stripe cards do not use this process and have been targets of criminals who can skim this information and create counterfeit cards for fraudulent use.
How Does The Chip Card Payment Process Work At The Point Of Sale?
- At the time of payment, the card is inserted into the chip-enabled terminal.
- The card needs to be inserted face up, with the chip end of the card being inserted into the reader.
- The card remains in the card reader during the entire transaction. Cardholders will follow the prompts displayed on the terminal screen.
- While in the reader, the card and terminal pass cryptographic data that authenticates the card, verifies the cardholder, and authorizes the transaction.
- The cardholder will remove the card once the payment is complete.
- If the payment terminal is not chip-enabled, cardholders will ‘swipe’ the card as they do today.
How Is A Chip Card Used At An ATM?
- For ATM transactions, cardholders will insert their card into the reader and follow the instructions on the screen.
- Depending on the type of ATM, they might be prompted to re-insert their card.
- They will leave the card in the ATM until the transaction is complete and the card is released. Then they will remove their card.
Do All Businesses Have Chip-Enabled Card Readers?
- No. There is no law requiring businesses to change or convert their payment terminals.
- While many merchants already have made the necessary changes, many others have yet to do so.
- There are incentives and liability shifts encouraging the switchover and it is hoped that the added protections against the high cost of fraud to both business and their customers will encourage merchants to make the change sooner rather than later.
Can An EMV Card Be Used In A Swipe-Only Payment Terminal?
- Yes. Chip cards will continue to have a magnetic stripe on the back, which will allow people to use their cards if a merchant has yet to update its card readers.
Can A Magnetic Stripe Card Be Used In An EMV Payment Terminal?
- Yes. EMV-compliant card readers will accept payment via the magnetic stripe on the back of cards without chips. Those cards will continue to be swiped as they are today.
- If a cardholder tries to swipe a chip card, an EMV device will recognize that it’s a chip card and prompt the cardholder to insert the card into the terminal.
How Do EMV Cards Work For Online Purchases?
- Cardholders will make payments online or by phone, just as they do today.
- While chip cards add another level of security for card-present purchases, they generally do not provide that same protection against fraud for card-not-present purchases made online or by phone.
- The communication between the chip card and payment terminal combine to make point-of-sale payments more secure, but that process is not in use with Internet or over-the-phone purchases.
Can Chip Cards Be Used Anywhere?
- Yes chip cards are the standard in much of the rest of the world, including frequently traveled places such as Europe, Canada and Mexico.
- In some places around the world, the current magnetic stripe cards like those used in the U.S. are no longer accepted at unattended terminals (e.g., vending machines).
- In the U.S., chip cards will continue to have a magnetic stripe on the back so they can be processed by merchants who have yet to convert their card readers to process chip-enabled transactions.
Is The United States The First To Use Chip Cards?
- While they have been in use in much of the rest of the world, the U.S. is among the last major adopters.
- This delay has a lot to do with the huge number of consumers, retailers, financial institutions and others involved in the payment cycle in the United States.
Can Cardholders Be Tracked With Their EMV Cards?
- No. Chip cards contain no tracking information.
WHAT HAPPENS IF A CHIP CARD IS LOST OR STOLEN?
- Cardholders need to report a lost or stolen card promptly by calling the toll-free number listed on the back of their card.
If they can’t access that number, they can call 936-327-1234 or Toll Free 800-324-9279 during banking hours.
- Replacement cards will be issued with new account numbers.
- You will need to update any automatic payments with their new numbers.
Is This The Ultimate Answer In Preventing Card Fraud?
- While chip cards can prevent some very costly types of card-related crimes, they can’t solve everything.
- Chip cards are expected to significantly reduce point-of-sale fraud and some of the fallout from data breaches, but at this point they offer no protection against crimes targeted at purchases made online or over the telephone.