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Online Banking & Bill Pay
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How EMV Chip Technology Affects You

Posted on October 1, 2015

October 1, 2015, is a big day in the world of credit and debit cards. 


It is the day that merchants are required to start processing transactions using EMV chip technology versus swiping a magnetic stripe.  So what does all this mean for you?

First, some key details for you to know:Person standing holding a credit card

  • EMV chip technology only works at the point of sale where the card is present
  • Consumers ARE NOT required to have EMV chip cards to make purchases
  • Only MERCHANTS are required to be EMV enabled by October 1, 2015
  • Financial institutions are NOT required at any time to issue chip cards

What is EMV?
New "smart" chip cards use EMV (which stands for Europay, MasterCard and Visa) technology, which generates a unique transaction code every time the card is used. These EMV cards have been around since the 1990s, and much of Europe and the U.K. already use them.

No technology can prevent all fraud, but the EMV chip cards are more secure than the traditional magnetic stripe cards. First, it's harder for fraudsters to make a fake physical card. Secondly, even if the bad guys get a hold of the unique transaction code, it's worthless because it works only one time.

Where Does EMV work?
EMV only works at the point of sale where the card is present. EMV will NOT work in the following situations:
  • Paying online
  • Paying over the phone
  • ApplePay, Samsung Pay, or other options where you swipe your phone (digital wallets)
  • Any type of reoccurring payments
  • Any terminal that doesn’t have EMV enabled, even if you are presenting a card with an EMV chip

Who is REQUIRED to be EMV ready?
Only MERCHANTS are required to be EMV enabled by October 1, 2015.  However, data shows that only approximately 314,000 of the 6 million retailers (about 5%) in the U.S. actually have the technology to make the switch today.

Financial institutions are NOT required at any time to issue chip cards.  About 6 out of every 10 financial institutions HAVE NOT issued chip cards as of yet.

Consumers ARE NOT required to have EMV chip cards to make purchases.

What really happens when this goes into effect on October 1, 2015?
The liability for card fraud now shifts to the merchant in certain cases.  Here is a quick breakdown:
  • A merchant has an EMV reader and the bank / credit union does not offer an EMV card – If fraud is committed, the liability rests with the bank / credit union
  • A merchant does not have an EMV reader and the bank / credit union does offer an EMV card – If fraud is committed, the liability rests with the merchant

What has On Tap Credit Union done to be prepared for EMV?
We are looking into issuing EMV chip cards in the future. We are in the process of completing due diligence and developing our timelines for this project.

Where can I find more information?
A great resource for information is www.gochipcard.com.
If you have any questions about EMV chip cards and how this transition affects you, please feel free to contact us.