Chip Cards: EMV, Chip and PIN, and Chip and Signature

What is EMV Technology?

EMV is a new standard for storing information in credit cards, an upgrade to the traditional magnetic stripe found on the backs of cards. Your personal and account information is stored in a small electronic chip embedded in the card, where it can be read by EMV terminals. It’s a more secure way to store information, providing better protection against identity and credit card theft, and it will soon replace the magnetic stripe as the preferred Card Verification Method (CVM) for card-present transactions.

Credit card with EMV Chip

EMV stands for “Europay, MasterCard, and Visa,” the three groups who began this initiative, but every credit card from every issuer will soon be required to conform to this standard. As of October 1st, 2015, the liability for a fraudulent transaction will fall on the least-EMV-compliant party. This means that the card issuer would be on the hook to pay if they don’t provide EMV cards, or the retailer would be held liable if it doesn’t provide an EMV-capable terminal to process the transaction.

Currently, most retailers still have terminals that read only the magnetic stripe and require you to swipe the card, but more retailers will begin using EMV terminals as 2015 progresses.

Chip-and-Signature vs Chip-and-PIN vs Magnetic Stripe

  • Chip-and-Signature cards require you to sign the screen or a slip of paper to authenticate the transaction. They are not as widely accepted as Chip-and-PIN outside the U.S.
  • Chip-and-PIN cards require you to enter a PIN with the keypad to authenticate the transaction, much like a debit card.
  • Most credit cards issued in the U.S. are currently Chip-and-Signature, which is not always accepted by strictly Chip-and-PIN terminals, like some unmanned train ticket machines in Europe.
  • Some cards have both Chip-and-Signature and Chip-and-PIN capability. Usually, one will be the preferred method of authentication. The issuing bank determines the features of a card, whether it includes a magnetic stripe, is Chip-and-PIN, Chip-and-Signature, or some combination.
  • Many EMV cards currently include a magnetic stripe, but this will probably change as the old technology is phased out. Some security experts cite including the magnetic stripe as a risk since it includes the card data in the same way that lead data breaches and card skimming.
  • Since consumers are used to entering a PIN with debit card transactions, many banks are issuing their debit cards as Chip-and-PIN, but still using Chip-and-Signature for credit cards.
  • In the U.S. after October 2015, the least EMV-compliant party in a transaction will be liable for fraudulent charges. This could be the credit card issuer or the retailer, if they don’t support the EMV standard.
  • EMV equipment is often compatible with contactless technology, but most cards in the US do not include it.
  • EMV is already widely used in countries outside the U.S. Some terminals do not even have magnetic stripe readers, so you will only be able to a card with a chip.
  • EMV eliminates some of the ways data is stolen or replicated because the chip technology is more difficult to clone than a magnetic stripe. Any data stolen from a merchant is useless because the data is expired after it leaves the merchant’s reader.
  • It is important to remember theft is still possible, and there are breaches in countries who use this technology, but EMV technology makes a security breach much more unlikely.

Q&A Video: What’s the Difference Between Chip-and-PIN and Chip-and-Signature?

Wondering why the United States is lagging behind other countries? Click here to read more: The Cost of Fraud Versus the Cost to Upgrade: Why Doesn’t the U.S. Use EMV Technology?

Legal Timeline for Card-Related Fraud Liability

There are three important upcoming dates regarding EMV technology: October, 2015, October, 2016, and October, 2017. Every credit card network has had their own milestones for shifting to EMV, but these two dates are common between all of them and represent the most significant shifts.

October 1st, 2015: This is the date at which the liability for fraud for card-present transactions will switch to the “least EMV-compliant party.”

This means that, after this date, if card fraud during a transaction at a physical retail store occurs (not a website), only those companies that have invested in upgrading to EMV standards will be protected from liability. The payment process includes several parties – credit card issuers, credit card networks, the retailer itself – and whoever has the least-secure form of EMV technology will be held liable for the fraudulent charges. This date excludes automated fuel dispensers at gas stations, which will continue to operate as they have been (see below).

October 1st, 2016: At this date, ATM counterfeit fraud will be included in the new liability rules, with the least-compliant party being held liable.

October 1st, 2017: At this date, automated fuel dispensers at gas stations will be included in the the shift described above.

Will The U.S.A. Be Ready For EMV?

Despite the liability deadline, by the end of 2015 only 70% of credit cards in the U.S.A. are expected to be EMV-ready, and only 41% of debit cards. This is according to a report released by the Aite Group in October, 2014.

Another study, released by Javelin Strategy & Research in April, 2014, was less optimistic: only 29% of credit cards are expected to be EMV-capable, and only 17% of debit/prepaid cards. It won’t be until 2018 that we reach 96% for credit cards and 98% for debit/prepaid cards (the Aite report predicts about the same thing by 2017).

The U.S.A. has been relatively slow to switch to EMV, compared to many parts of the world, and, partially as a result, fraud has been on the rise. According to the Aite report, credit card fraud has doubled from 2007 to 2014, reaching 10 cents out of every $100 in transactions.

Most financial institutions are preparing to use Chip-and-Signature to secure credit cards, and Chip-and-PIN to secure debit cards. There are several reasons for this, including a cheaper price, the ability to use existing hardware and software, and to make the new experience as easy for consumers as possible (people are accustomed to signing for credit purchases and using a PIN for debit). Eventually we hope to see both kinds of cards capable of using both kinds of Chip verification.

According to EMVCo, a company established to “facilitate worldwide interoperability and acceptance of secure payment transactions,” 32% of transactions around the world are EMV. The U.S.A. in particular is dragging this average down.

EMVCo breaks the world down into groups for comparison: Western Europe is leading the way when it comes to EMV transactions, followed closely by “Canada, Latin America, & The Caribbean” and “Africa & The Middle East.” The U.S.A. barely registers at all, with less than 1 percentage point.

Percentage of Card-Present EMV Transactions
World Zone July 2013 – June 2014 January 2014 – December 2014
Europe Zone 1 (Western Europe) 96.33% 96.60%
Canada, Latin America, & The Caribbean 83.33% 85.41%
Africa & The Middle East 75.90% 80.00%
Europe Zone 2 (Eastern Europe) 50.47% 58.04%
Asia 19.42% 27.01%
The United States .03% .12%

Why Are Retailers Blocking Chip Cards?

Walgreens terminal with blocked chip reader.

This Walgreens store uses a terminal that supports reading chip cards, but they block it with a plastic plug.

To prepare for the October 1st liability deadline, new terminals are being installed that can accept Chip payments, usually in the form of Chip-and-Signature.

Some retailers are already prepared for the change, and in their stores you’ll find terminals that let you insert your card into the bottom of the reader. Instead of the traditional card swipe, this is known as “card dipping, and you’ll need to stick the card in and leave it there until prompted to process the transaction.

You may also find terminals that look like they could accept a Chip card but have been plugged up. This is most likely because the retailer has plans to switch over to EMV-compliant hardware and software, but the full system is not yet ready so they want to prevent people from inserting their card that way. Individual retailers may also have their own reasons for waiting longer to switch over to EMV-compliance.

We’re working to research which retailers are currently accepting chip cards, and are trying to expand our list. If you have information about how a major retailer accepts chip cards, please contact us!

Retailers With Chip-Enabled Terminals

We’re doing our best to catalog retailers who are accepting chip cards. We can’t guarantee the accuracy of this list since everything is changing quickly as the October 2015 deadline approaches, so please contact us if you have evidence of chip cards being accepted or not at any of these retailers.

Retailer Chip-Enabled Terminals Possible to Make Chip-card Payment? Verification Method
Apple Store Yes Yes Asked Employee
Barnes & Noble Yes No, disabled Tested
CVS Pharmacy Sometimes No, disabled Tested
Lowes Yes No, disabled Tested
Valero Gas Station Yes No, disabled Tested
Walgreens Yes No, disabled Observed plastic plug blocking chip slot
Walmart Yes Yes Tested

Where Can I Get A Card With A Chip?

We’ve put together this list to show you what issuers offer Chip-and-Signature cards. Most issuers in the U.S. only offer Chip-and-Signature, but there are a few that offer Chip-and-PIN. For Chip-and-Signature cards, see here. This list is constantly updated as new cards become available. If your card is in the list, but doesn’t have a chip, you can request a new one from your issuer.

How a card behaves at the checkout depends on the Cardholder Verification Methods, or CVMs, supported by the card and their priority order. If you REALLY want to dig into these technologies and find out for yourself how your cards will be processed by different types of card readers, check out this Reddit thread about CVM lists and this thread about a user-maintained database of CVM lists for popular cards.

Screen shot 2015-03-24 at 3.01.29 PM

Not this kind of chip and pin

Chip-and-PIN Cards In The U.S.A

The U.S. currently does not offer many Chip-and-PIN cards. However, there are a few available to consumers now and there will be more options throughout 2015.

Bank of America

Barclaycard

Citi

Credit Unions

Diners Club

USAA

Wells Fargo

Screen shot 2015-03-24 at 2.53.22 PM

The Chase Sapphire Preferred Card is enabled with Chip-and-Signature

Chip-and-Signature Cards in the U.S.A

Currently, most chip cards in the U.S. are chip-and-signature only. A few have PIN capabilities, which means you can set a PIN, allowing the card to be used in situations where a PIN is required.

Note: many Chip-and-Signature cards will still work with most international merchants, except in the case of unmanned terminals (tollbooths, gas stations, kiosks). You may encounter some problems at certain terminals if you only have the Signature capability, and for this reason we recommend doing your best to get a PIN card when traveling outside the country.

American Express

Bank of America

Barclaycard

Note: The Barclaycard Arrival Plus World Elite MasterCard is Chip-and-PIN sometimes and Chip-and-Signature other times. If it is a manned terminal (person at the checkout), it uses chip-and-signature. If it’s an unattended kiosk, it uses chip-and-PIN. To obtain the PIN for your card, call customer service or go to barclaycardus.com, create a login, and request a PIN.

Capital One

Note: Capital One has plans to implement chip technology on most of its cards by the end of 2015.

JP Morgan Chase

United MileagePlus Club Card *Will be chip-enabled, and existing card members will be able to request a replacement EMV Chip Card.

Citi

Note: You may request a replacement card with a chip if your current card does not have one.

Discover

  • Discover chip cards started becoming available in December 2014 and cardmembers will be issued chip cards throughout 2015.

Synchrony Bank

Note: The non-MasterCard version of the Walmart card does not have an EMV chip.

USAA

Note: USAA members are eligible to request a Chip-and-PIN Card if they plan to work or travel overseas.

US Bank

*U.S. Bank became the first in the United States to issue a dual EMV chip and contact-less payment card for retail customers with its FlexPerks Travel Rewards Visa Signature Credit Card.

Wells Fargo

All Wells Fargo chip cards are enabled with Chip-and-PIN technology.

Prepaid Chip-and-PIN

Prepaid Chip-and-PIN cards offer the security of chip technology, but they often aren’t linked to your personal information and require you to pre-load the card with funds. You can get these with low or no credit because there is typically no credit check to qualify. Prepaid Chip-and-PIN Cards can also be beneficial for college students studying abroad because they can’t spend more than the loaded amount.

Best Chip Cards For You

Barclaycard Arrival Plus World Elite MasterCard

  • 2x miles awarded for all purchases
  • 10% mile bonus when redeemed for travel
  • Introductory offers to earn bonus points
  • MasterCard World Elite Concierge and other luxury travel benefits
  • No foreign transaction fees
  • Complimentary FICO score

Chase Sapphire Preferred Card

  • 2X points for travel and dining purchases
  • 20% discount on travel purchases through Chase Ultimate Rewards
  • Introductory offers to earn bonus points
  • 1:1 point transfers with popular frequent flyer programs
  • No foreign transaction fees

Citi Hilton HHonors Reserve Card

  • 10 HHonors points per dollar for purchases from hotels within the Hilton Portfolio
  • 5 HHonors points per dollar for purchases at airlines and car rental agencies
  • 3 HHonors points per dollar for all other purchases
  • Earn 2 weekend night certificates for spending $2,500 in the first 4 months
  • Additional hotel benefits and discounts
  • Opportunities to earn higher status with better benefits
  • No foreign transaction fees

Marriott Rewards Premier Card

  • 5 points per dollar spent at Marriott locations
  • 2 points per dollar spent at airlines, car rental agencies, and restaurants
  • Annual free night stay as well as credits towards Elite status
  • Introductory offers to earn bonus points
  • No foreign transaction fees

The Insider

Brendan Harkness
Best Hotel Credit Cards – Summer 2015
Brendan Harkness | Aug 04, 2015

Hotel credit cards can help you save money and provide great perks like room upgrades, free internet, and complimentary services.

Read More
John Ulzheimer
Q&A Video: How Do Credit Card Issuers Adjust Their Risk Level?
John Ulzheimer | Jul 31, 2015

When a credit card user gets a credit limit increase, does the credit card issuer take part of the credit limit away from someone else?

Read More
John Ulzheimer
Q&A Video: When Will My Credit Card Be Closed For Inactivity?
John Ulzheimer | Jul 30, 2015

You can't keep your credit cards locked up in your drawer forever - if you don't use them, eventually the issuer will close them.

Read More