You may have heard about a type of payment technology called an “EMV®.”

EMV chip cards have become common both in the U.S. and abroad. The main advantage of these cards is that it’s harder to commit fraud at a chip-enabled point-of-sale terminal with an embedded chip credit card than a traditional magnetic-strip card.

Below we’ll answer some commonly asked questions about EMV chips and explain the security features of this type of card below.

What Does EMV Mean?

“EMV” is the global standard for processing credit card transactions. An EMV card is also known as a smart card, chip card or integrated circuit card (ICC). It is a plastic card with an embedded computer chip that stores information, does calculations and makes decisions.

When Will EMV Cards be the Standard in America?

The migration to EMV was an industry-wide effort involving card issuers, merchants, card processors, merchant acquirers, and payment networks. Today, every card issued in the U.S. will have a chip.

Why Would I Want an EMV Chip Card?

A chip card can help reduce fraud for card-present transactions at chip enabled terminals. Another main reason is convenience when travelling abroad. With Europe and the rest of the world already adopting the technology, an EMV chip card may be useful the next time you take off for business or pleasure travel outside the U.S.

EMV chips offer a more secure way of storing and processing data. According to EMV-Connection, the embedded chip in the card is a microprocessor that provides transaction security features and application capabilities not possible with traditional magnetic strip cards when used at chip-enabled terminals.

There are three main ways chip payment technology can help prevent counterfeit card use:

  • First, the cardholder data and security keys are stored inside the chip. Even if this data was copied, it can’t be used to create a new chip with the same data.
  • Second, with each payment transaction a one-time code called a cryptogram is generated by the chip. This cryptogram proves the card is authentic and any use of the same unique data would be detected by the issuer as fraud.
  • Third, EMV cards use Cardholder Verification Methods (CVMs) such as a PIN or signature at the point of purchase to help ensure the person using the card is in fact the real cardholder.

What’s the Difference Between a Chip-and-Signature and a Chip-and-PIN Card?

EMV cards can verify the cardholder either with a signature or four-digit personal identification number (PIN). A chip-and-PIN card requires the cardholder to enter the PIN at the point of purchase and this code must correspond with the information on the chip for the transaction to process. If someone steals your chip credit card they won’t be able to rack up charges without the PIN. Chip-and-signature cards require the cardholder to provide a personal signature at the point of purchase.

Originally published February 17, 2015

Updated June 7, 2019

EMV® is a registered trademark in the U.S. and other countries and an unregistered trademark elsewhere. The EMV trademark is owned by EMVCo, LLC.

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