How EMV technology affects financial institutions

We hear a lot about EMV technology these days. In the U.S. alone, 13,000 U.S. financial institutions issue EMV-enabled cards and 450 million EMV cards were in use as of last year. EMV technology—which stands for Europay, Mastercard, Visa, the developers of the chip technology—was created to help reduce card fraud, which was a growing threat every year.

Committing card fraud by duplicating somebody’s card data located on the magnetic strip on the back of the card was/is a relatively easy thing to do. With the right equipment and a little know-how, a criminal could quickly and easily capture someone’s information at ATM or merchant locations with card skimmers. It’s a practice that continues to rise in frequency. A recent FICO report found that the number of compromised U.S. ATMs and merchants rose 39% in the first six months of 2017, compared to the same time in 2016.

With the advent of EMV technology on more and more cards, scammers are looking for and finding weaknesses at gas stations and merchant locations that haven’t converted over to chip-enabled card readers. The National Association of Convenience Stores (NACS) estimates that it will cost the industry an estimated $4 billion to replace card readers, which, in some cases, necessitates completely replacing pumps and system hardware and software. The benefit is that card terminals will be more difficult to hack. It’s a move that Visa and Mastercard expect to better protect consumers, companies, and banks.


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