What is chip technology? And how can it protect you?

Published April 27, 2015

Maps MasterCardsWith the new credit cards coming to Maps, we're rolling out chip technology, which can make your credit and debit cards more secure.

Here are some common questions about the technology and how it works.

What is chip technology?

This is a tiny computer chip, sometimes called an EMV chip, housed in credit and debit cards. They authorize or validate transactions — making your shopping trips more secure. Here are some common questions about the technology and how it works. 

Many U.S. financial institutions are looking into chip technology to make card transactions more secure and help fight the rising costs of fraud. Federal government regulations and our zero liability policies already protect you from liability for most fraudulent transactions made on your account, but when payment industry participants are hit by fraud, everyone’s costs increase.

What does EMV mean?

EMV stands for the three primary payment associations in Europe — Europay, MasterCard, and Visa — when they created standards for the chip technology. Europe began experimenting with chip card technology in the early 1980s, and this group created standards so that all financial applications that use chip technology would be interoperable, ensuring that adoption in a wide scale would be possible.

How does it work?

The payment terminal sends payment information just like it does now when you swipe your card. With chip technology, though, it also sends a unique cryptogram that provides another layer of card verification. When combined with your PIN or signature, this layer of security helps keep your funds safe and protects your card against counterfeiting.

The transaction looks a little different than a swipe — you insert your card and leave it in place for the duration of the transaction. You’ll either sign a sales draft or key in your PIN to complete the transaction, depending on the requirements of the merchant.

If you’re unsure how to use the terminal, just ask the person who is ringing up your purchase.

What if I go to a store that doesn’t have chip terminals?

It’s possible that some merchants and card issuers may choose not to convert and will continue to use mag stripe technology for a time. Your card will still have a magnetic stripe you can swipe in older terminals to make purchases. 

If you visit retailers that have upgraded to EMV terminals before we supply you with a card containing a chip, you can still use a magnetic stripe card. If you’ve traveled internationally, you’ve probably seen some of these terminals in action. 

Will magnetic stripes go away?

Other countries are moving away from magnetic strips, and a card with a chip will eventually be necessary when you travel internationally.

What is the benefit to Maps?

It is good for the credit union — and our member owners — to reduce the costs associated with fraud. And this technology is the most effective way to do this right now.